TUPE amendments come into effect
Labour & European Law Review Weekly Issue 354 29 January 2014
Following a consultation last year, the government issued new regulations amending the 2006 TUPE regulations, which come into effect tomorrow.
The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2013 amend the 2006 legislation, as well as the provisions of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) relating to collective redundancies.
The following is a brief overview of the key changes:
- The test for service provision changes has been revised so that the activities carried out before and after the transfer must be “fundamentally” the same.
- Terms derived from collective agreements can be renegotiated to take effect one year after the transfer even though the reason for making the change is the transfer itself, as long as the terms of the amended contract are no less favourable overall to the employee.
- Transferred employees can no longer benefit from subsequent collective agreements negotiated between the transferor and their trade union following the transfer if the transferee is not a party to those negotiations.
- Although employers are still unable to make variations to contracts of employment where the sole or principal reason is the transfer itself, they will now be able to make variations where the sole or principal reason is an “economic, technical or organisational (ETO) reason entailing changes in the workforce” and the employee agrees to the variation. There is also a new provision permitting contractual variations where the terms of the contract allow for the variation.
- Similar amendments have been made to the automatic unfair dismissal provisions, in that a dismissal before or after the transfer where the reason for the dismissal is the transfer itself is automatically unfair, but not if the dismissal is for an ETO reason entailing changes in the workforce. Whether a dismissal for an ETO reason is unfair will depend on whether the employer acted reasonably in treating that reason as sufficient to justify dismissal and whether the other requirements of the general law on unfair dismissal has been met.
- The regulations also allow for a change in the location of the workforce to be within the scope of an ETO reason. Previously there had to be a reduction in the numbers of the workforce or a change in the job functions of some of the workforce.
- TULRCA has been amended so that the transferee may elect to consult (or start to consult) representatives of transferring staff about proposed collective redundancies prior to the transfer (to meet the consultation requirements under the Act), as long as the transferor agrees.
- Employee liability information will have to be provided to the transferee by no later than 28 (instead of 14) days before the transfer.
- Micro businesses employing 10 employees or less will be entitled to inform and consult affected employees directly without the need to elect employee representatives when there is no independent trade union or existing employee representatives.
Thompsons will be producing more detailed guidance to the regulations which will be available shortly on its website.
Emma Game at Thompsons Solicitors said: “Thankfully the proposal to strip out Service Provision Changes has not come into fruition. However, the proposal to change the definition is a step backward for employees’ rights and favours unscrupulous employers looking to avoid their responsibilities. We also have grave concerns about an employer’s right to change or vary those parts of employment contracts that derived from collective bargaining by a trade union after 12 months, the suggestion being that those terms are somehow inferior to other contractual terms and conditions of employment.”
To access the regulations, go to: http://www.legislation.gov.uk/uksi/2014/16/contents/made
To access the government’s guidance, go to: https://www.gov.uk/government/publications/tupe-a-guide-to-the-2006-regulations