Member Article

Happy New TUPE!

On 31st January 2014, significant changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) come into force, writes Amy Ross-Sercombe, head of employment at Clough & Willis.

There has been wide spread debate and discussions on them as businesses have struggled with the obligations set by TUPE for years, and it is widely accepted that they are a “gold plated” version of the law required by the European Directive. Unfortunately, not all the changes proposed in 2013 will be made but there are certainly benefits for employers….

The TUPE regulations commonly apply in situations where a business is transferred to new owners. However, they can also kick in where a company changes a service provider; for example, if a business contracts out its cleaning and then decides to switch supplier.

When the changes take effect, TUPE will only apply if the activities carried after the transfer are fundamentally the same as those before. So, if the new provider has a particularly novel way of carrying out their services, TUPE may not apply.

Varying contracts of transferring employees could also be easier. Where terms of a transferring employee have been incorporated from a collective agreement, the new employer may be able to vary them so long as the changes take place more than a year after the transfer and the employee’s contract as a whole is no less favourable than before.

Collective agreements aside, employees will be protected from contractual changes but only if the sole reason for the change is the transfer itself. Dismissing a transferred employee could be simpler too as they will only be protected from dismissal if the sole reason is the transfer. However, there is certainly more case law to come on this point.

Another key element, which many employers will be pleased to hear, is that from May 2014, where the new employer is proposing to make 20 or more employees redundant following a TUPE transfer, it will be able to begin consultations with its new employees before the transfer has actually taken place provided that the current employer agrees.

Other key changes include; employers will have to provide employee liability information to a person’s new employer 28 days before the transfer; it’s currently 14, a change of workplace will now be an economic, technical or organisational (ETO) reason for dismissal; and “micro businesses”, those with less than 10 employees, will be able to inform and consult directly with their employees regarding a TUPE transfer, provided that there isn’t a Union or elected representative already in place.

To sum up, dealing with TUPE transfers remains complex and the changes may not go as far as employers would have liked but they will bring benefits to UK businesses.

This was posted in Bdaily's Members' News section by Clough and Willis .