TUPE Changes – Government Launches Consultation

The Transfer of Undertakings (Protection of Employment) (TUPE) Regulations 2006 extended the scope of the protection available to employees when a business or undertaking changes hands and aimed to provide greater clarity, in particular making it clear that the Regulations apply to service provision changes (e.g. contracting out). However, amidst concerns that the 2006 Regulations have not achieved what they were designed to do, and claims by businesses that they unhelpfully ‘gold-plate’ the implementation of the EC Acquired Rights Directive and are overly burdensome and bureaucratic, the Government carried out a call for evidence on proposed amendments.

Having examined the responses, the Government has published for consultation its proposed changes to the TUPE Regulations. Views are sought on:

  • Repealing the provision which includes most service provision changes within the scope of the regulations;
  • Repealing the specific requirements regarding the notification of employee liability information, whilst making it clear that the transferor should disclose information to the transferee where it is necessary for both parties to perform their duties regarding information and consultation;
  • Changing the wording of the provisions that restrict changes to contracts, those that give protection against dismissal and those concerning a substantial change in working conditions to the material detriment of the employee so that they more closely reflect the wording of the Directive and case law of the Court of Justice of the EU;
  • Amending the meaning of ‘entailing changes in the workforce’ so that it can cover changes in the location of the workforce. This would align the meaning of ‘economic, technical or organisational reason entailing changes in the workforce’ with the definition of redundancy under the Employment Rights Act 1996, so that some dismissals involving a place of work redundancy are capable of being fair for unfair dismissal purposes;
  • Introducing an amendment to ensure that consultations by the transferee on collective redundancies with staff who are due to transfer count for the purpose of the obligation to consult on collective redundancies, thus easing the burdens on business; and
  • Including micro businesses (defined by the EU as those employing fewer than 10 persons whose annual turnover does not exceed €2 million) within the scope of the proposed amendments but allowing such businesses to inform and consult employees directly regarding transfers, rather than through representatives, in cases where there is neither a recognised union nor existing representatives.

The consultation also seeks views on whether it would be desirable to limit the future applicability of terms and conditions derived from collective agreements to one year from the transfer and whether a transferor should be able to rely upon the transferee’s economic, technical or organisational reason entailing changes in the workforce in respect of pre-transfer dismissals.

Consultation closes on 11 April 2013.