On 31 January 2014, The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 were finally brought into force. The 2014 regulations amend existing legislation, mainly The Transfer of Undertakings (Protection of Employment) Regulations 2006.

The key changes to the current legislation are as follows:

1. Pre-transfer consultations – a new Section 198A Trade Union and Labour Relations (Consolidation) Act 1992

A transferee that proposes to make post-transfer redundancies will be able to elect to carry out a pre-transfer consultation with employees affected by the transfer, including the employees who are to transfer over. Such pre-transfer consultations will require the consent of the transferor.

In cases where post-transfer redundancies are expected, pre-transfer consultations should provide for greater certainty at an earlier stage for those affected by the transfer. However, the consent of the transferor will be required and there may well be situations in which transferors are reluctant to give their consent. For example, a transferor may have concerns that the transfer may not ultimately go ahead, or have concerns where an incoming service provider is one of the transferor’s competitors.

2. Meaning of “service provision change” – Regulation 3 TUPE 2006

Previously, the term “service provision change” was defined in relation to “activities” changing hands between parties (see Reg.3 (1)(b) of TUPE 2006). The amendments clarify the meaning of “service provision change” and state explicitly that references in Reg.3 (1)(b) of TUPE 2006 to “activities” means activities which are fundamentally the same as the activities carried out previously.

While the new provision provides clarity as to the definition of “service provision change” it effectively mirrors the drive of the case law on this issue (Churchill Dulwich Ltd. v Metropolitan Resources Ltd [2009] ICR 1380). It is therefore possible that this amendment will make little difference in practice.

3. Variation of contracts / Dismissals because of transfers – Regulations 4 and 7 TUPE 2006

The wording of Regulations 4 and 7 has been modified in order to give the transferee more opportunity to vary contracts of employment, and to make dismissals, for an economic, technical or organisational reason entailing changes in the workforce. Importantly, the term “changes in the workforce” can now include changes to the workplace.

The benefit to business will be that dismissals made as a result of relocation of the workforce following a transfer will not be automatically unfair. This should make them easier to carry out.

4. Collective agreements –  a new Regulation 4A TUPE 2006

With regard to transfers that take place on or after 31st January 2014, transferees will no longer be bound by changes to collective agreements that are made after the transfer. This should give businesses more certainty about their future obligations in respect of their workforce.

5. Employee liability information – Regulation 11 TUPE 2006

For transfers taking place 3 months after 31st January 2014 (1st May 2014 onwards), employee liability information (information about transferring employees) must be provided by the transferor at an earlier stage in the process. Previously this information had to be provided at least 14 days before a transfer. For transfers from 1st May 2014 onwards, employee liability information must be provided at least 28 days in advance. This should give transferees more time to process information about transferring employees, and will assist with the transferee’s option of conducting pre-transfer consultations.

6. Individual consultation with transferring employees – Regulation 13A TUPE 2006

Small businesses with fewer than 10 employees will now be able to consult directly with affected employees in certain cases. This will apply to employers with fewer than 10 employees. It does not relate to the number of employees transferring. As such, collective consultation will continue in cases of small transfers by large employers.

Conclusion

TUPE 2006 remains a complex area of employment law. The amendments made to TUPE 2006 by the 2014 Regulations are not revolutionary. However, the changes are likely to be welcomed by the business community, as they are practical in nature and appear to be geared towards making TUPE transfers easier to implement.

If you require more information about these changes, please contact Richard Monkcom, Partner and Charles Avens, Solicitor, in Druces LLP’s Employment Team.