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24 January 2013

Government consults on amendments to TUPE

The Government has issued a new consultation on proposed changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), including the removal of service provision changes from express protection under the Regulations.

This consultation follows a ‘call for evidence’ issued in November 2011, seeking evidence of the effectiveness of the existing TUPE Regulations and to examine concerns expressed by businesses that the legislation is ‘gold-plated’ and overly bureaucratic. 

The Government issued its response to the call for evidence in September 2012, indicating that a further consultation would be carried out.  Any changes to the Regulations are subject to the requirements of the European Acquired Rights Directive, which is implemented by the Regulations.

The proposals being consulted on by the Government are in summary:

• Repealing the existing provisions covering service provision changes (ie outsourcing, insourcing and re-tendering) within the Regulations;

• Repealing the specific requirements for the disclosure of Employee Liability Information, instead making it clear that information necessary for the purpose of information and consultation should be disclosed to the transferee in advance of the transfer;

• Amending the wording relating to changes to terms and conditions and protection against dismissal, to more closely reflect the minimum requirements of the Acquired Rights Directive and making it easier to amend terms and conditions post-transfer;

• Ensuring that dismissals arising from a change in the location of the workplace are included within the meaning of an ‘economic, technical or organisational’ (ETO) reason, with the result that such dismissals are not automatically unfair;

• Amendments to clarify that collective redundancy consultations can be carried out by the transferee with staff who are due to transfer, prior to the transfer taking place;

• Allowing micro-businesses to consult directly with individual employees, rather than needing to elect representatives (unless union representatives or workplace representatives are already in place);

In addition, the consultation seeks views on the possibility of limiting the future applicability of terms and conditions derived from collective agreements to one year after the transfer.  It also asks whether or not a transferor should be able to rely on the transferee’s ETO reason, to allow for ETO dismissals to take effect prior to the transfer.

The consultation also promises revised guidance on the operation of the Regulations in practice.

The consultation closes on 11 April 2013.  The Government has indicated that any changes are likely to take place from October 2013, although it is seeking views on transitional arrangements including a ‘significant lead-in period’ for the repeal of the service provision changes provisions.

Comment

Removing service provision changes from express protection under the Regulations, whilst no doubt an appealing prospect for many businesses is likely to lead to a reversion to the pre-2006 situation whereby some service provision changes are covered under TUPE and some are not.  This will arguably result in greater uncertainty, and a need for some organisations to seek legal advice on whether TUPE applies to their given situation.

A copy of the consultation paper is available on the BIS website

For any employment enquiries please contact the Steeles Law employment team on employment@steeleslaw.co.uk or 01603 598000.