TUPE
TUPE
or not
The Transfer of Undertakings (Protection
of Employment) Regulations 2006
(TUPE) provide a legal framework for
transfers of staff. Some argue that
they provide substantial complications
to a business’ sale and generally work
against commercial interest in such
transactions. There is the argument
that TUPE is unnecessary and should
be abolished in its entirety; after all
other jurisdictions such as the US have
minimal employment regulations in
respect of the transfer of businesses.
This is not possible in the UK however,
due to our EU obligations as TUPE is
implemented under the EU Acquired
Rights Directive (ARD).
The Government’s commitment to
reform TUPE is based on an intention
to support flexibility and effectiveness
in the labour market, ensuring fairness
for both employees and employers and
removing parts of TUPE which the ARD
does not require national governments to
implement.
The changes include:
Allowing renegotiation of terms derived
from collective agreements one year
after the transfer, even if the reason for
seeking to change them is the transfer,
provided that overall the change is no
less favourable to the employee.
Including changes in the location of the
workforce following a transfer within
the scope of economic, technical or
organisational reasons entailing changes
in the workforce, thereby preventing
genuine place of work redundancies
from being automatically unfair.
Amending Regulation 4 (in relation
to changes to terms and conditions)
and Regulation 7 (protection against
dismissal because of a transfer) to bring
them closer to the language of the ARD.
Keeping pace with case law by stating
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.
Amending the Trade Union and Labour
Relations (Consolidation) Act 1992
to make it clear that consultation over
possible redundancies which begins pretransfer can count for the purposes of
complying with the collective redundancy
rules, provided that the transferor and
transferee can agree and the transferee
has carried out meaningful consultation.
Improving the TUPE process for micro
businesses by allowing such businesses
to inform and consult directly with
affected employees when there is no
recognised independent union, nor any
existing appropriate representatives.
The reforms implemented under the
2014 Regulations apply from 31 January
2014, with the following exceptions:
The changes in deadline to provide
employee liability information will only
apply to transfers, which take place on or
after 1 May 2014.
The ability for micro-businesses to inform
and consult employees directly will only
apply to transfers that take place on or
after 31 July 2014.
The Government has also sought to
improve the current guidance it issues
with regard to TUPE.
Importantly, despite the Government’s
initial stated desire, they are not
removing provisions concerning changes
in service provision (for example, when a
service is outsourced) from the definition
of what amounts to a TUPE transfer.
This is due to concern that uncertainty
caused by repealing these provisions
could hinder commercial agreements,
which would affect both the economy
and labour market. This recognises the
dangers of returning to the uncertainty
that existed prior to the provisions being
introduced in 2006.
The deadline for the transferor’s
obligation to provide employee liability
information will be extended from 14
to 28 days prior to the transfer.