On 31 October 2013 the government published the draft amendments to the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).
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Simply put, TUPE is a set of rules that protects employees if the business they are employed by changes hands, perhaps due to a merger, acquisition or service provision change. By operation of law the terms and conditions of the employees’ contract continues to apply to the new employer when the transfer takes place. The rules also protect employees from being dismissed because of the transfer or for a reason connected to it.
However, the current rules are thought to be quite burdensome, costly and over-complicated for employers. Thus as part of their ‘red-tape challenge’ the government have introduced the proposed amendments to improve how TUPE works. The changes include:
1. Allowing dismissals that are for reasons connected with the transfer to be dealt with under general unfair dismissal principles, instead of being classified as automatically unfair. Dismissals because of the transfer itself will still be automatically unfair.
2. Enabling dismissals which are due to workforce relocation to be brought within the scope of the ‘economic, technical or organisational’ reason defence.
3. Removing the restriction on the new employer making post-transfer changes to an employee’s terms and conditions for a reason connected with the transfer. However, it will still be impermissible to make variations to the employee’s contract by reason of the transfer itself unless there is an economic, technical or operational reason for the change.
4. Allowing post-transfer changes which are by reason of the transfer, as long as the employee’s contract contains terms which permit variations.
5. Permitting the new employer to renegotiate terms and conditions stemming from a pre-transfer collective bargaining agreement as long as the changes take place one year after the transfer and are “no less favourable overall” to the employee.
6. Allowing businesses with fewer than 10 employees to consult with them directly about the transfer instead of through representatives.
7. Extending the deadline for providing employee liability information from 14 days to 28 days before the transfer.
The above amendments are expected to come into force in January 2014. If you require advice concerning the provisions of TUPE then please contact our employment department on 020 7228 0017.