In January of this year the Government consulted on proposed changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The Government announced its response in September and the draft regulations amending TUPE have now been published. They will be placed before Parliament in December with the expectation that they will come into force in January 2014.
The changes which are set out in the draft regulations are broadly as set out below.
AMENDMENTS TO TUPE
• ETO defence – A change in the place of work after a transfer should be included within the term ‘changes in the workforce’ for the purposes of an economic, technical or organisational defence. This meaning will apply to both variations of contract and also to dismissal. This amendment will be welcomed by transferees as applying recent common law, transferees had the risk of automatic unfair dismissal claims on a change of location as a matter of course;
• Variation to a contract of employment will be permitted if the reason for the variation is the transfer, so long as the terms of the contract permit the employer to make that variation;
• Employee liability information – The deadline by which the transferor is obliged to provide employee liability information has been increased from no fewer than 14 to no fewer than 28 days before the transfer. This change will not be implemented until three months after the commencement date of the amended legislation.;
• Micro-businesses – Employers with less than ten employees are now allowed to inform and consult directly with all affected employees in cases where there are no existing appropriate representatives. This amendment will not apply until six months after the commencement date.;
• Collective agreements – Where a contract incorporates provisions of collective agreements which are agreed from time to time, any collective terms which are agreed after the date of the transfer without the transferee’s involvement will not automatically transfer;
• Service provision change – The current definition of ‘activities’ has been amended so that they must be ‘fundamentally the same as the activities carried out previously’ for there to be a qualifying service provision change; and
• Renegotiation of employment terms derived from collective agreements is allowed one year after the transfer so long as the overall changes are no less favourable to the employee.
AMENDMENTS TO TULCRA
Pre-transfer Consultation – The Trade Union and Labour Relations (Consolidation) Act 1992 is amended to allow consultation by a transferee to be done before any TUPE transfer in respect of employees who are likely to be made redundant after the transfer. There are certain conditions that must be met for this to apply, significantly;
• The transferee must be proposing to dismiss 20 or more employees as redundant at one establishment within a period of 90 days or less; and
• The transferee must give the transferor written notice that it intends to do this and the transferor must agree. It will be interesting to see how co-operative a transferor may be in allowing a transferee prior access to the workforce for consultation.
A transferee may at any time choose to stop pre-transfer consultation and if it does choose to do so, anything done up to that point will have no effect. In practical terms it is most likely that the pre-transfer consultation amendment will be the most significant change to the current legislation. If you would like further information on the potential implications of these changes, please contact Charles Avens, Solicitor, or Richard Monkcom, head of Druces LLP’s Employment team.This note is not intended to be legal advice. It is for general guidance only and reflects the current situation as at 28 November 2013.