Changes to TUPE from January 2014

The Government is amending the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) so that they place less of a burden on businesses. The proposed changes are due to come into force in January 2014.

We examine some of the key changes and what they will mean for businesses.

Dismissal and changes to terms and conditions

TUPE gives employees enhanced protection against unfair dismissal and changes to terms and conditions on a sale of a business or outsourcing by providing that dismissals are unfair and changes void if the sole or principal reason is the transfer itself or a reason connected with the transfer that is not an Economic, Technical or Organisational (ETO) reason.

The law will be amended so that references to dismissals and changes to terms and conditions for a reason "connected" with the transfer no longer apply.

This means that dismissals will only be automatically unfair where they are by reason of the transfer and variations to contracts will be permissible where they are pursuant to a contractual provision (for example, a mobility clause) and where such a change would be permitted had there not been a transfer.

Dismissals arising from change of location

The law will be amended so that where the place of work changes after the transfer any redundancies due to that change will not be automatically unfair. This will mean that businesses should not face unfair dismissal claims solely because of a change in location of the workplace.

Collective agreements

TUPE will be amended to allow for the renegotiation of terms derived from collective agreements one year after the transfer, even if the reason for the change is the transfer, provided that the change is no less favourable to the employee.

Duty to inform and consult over collective redundancies

The changes mean that the new employer can now start consulting with the transferring employees about proposed collective redundancies prior to the transfer and this will count for the purposes of statutory consultation requirements provided that the transferor and transferee agree.

Micros businesses

Micro businesses (with ten or fewer employees) will be able to inform and consult employees on a TUPE transfer directly rather than through representatives where there is neither a recognised union nor existing representative.

Service provisions changes

The rules will be clarified so that for there to be a TUPE service provision change the activities carried on after the change in service provision must be "fundamentally or essentially the same" as those carried on before it.

Employee liability information

Employee liability information will have to be given 28 days before the transfer rather than the current 14 days.

It will be interesting to see to what extent these changes reduce the burden on employers when undertaking a TUPE transfer and if they also continue to provide adequate protection to employees during and after the transfer process.

For further information contact David Hacker.