Key changes to TUPE due in force in January 2014
06 December 2013
Changes to TUPE are due to come into force in January 2014, driven by complaints from parts of the business sector that the UK’s TUPE regulations went further than the requirements placed on member states by the Acquired Rights Directive for the safeguarding of employee rights in the event of a business transfer or service provision change.
At the time of writing, it has not been confirmed when in January the amendments will come into force, or whether there may be some delay. We will keep you informed.
The key changes can be summarised as follows:
- The rules on service provision changes will remain, but the legislation will clarify 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.
- Transferors must now provide employment liability information not less than 28 days before the relevant transfer (an increase from the 14 day period currently in place).
- There will be a static approach to the transfer of terms derived from collective agreements, confirming existing case law. Where a term is incorporated into an employee’s contract through collective agreement and the term takes effect post transfer, TUPE will effectively freeze terms at the point of transfer, where the transferee was not party to any such agreement.
- Transferees will be able to change terms derived from collective agreements one year after the transfer, provided that the overall change is no less favourable to the employee.
- The term “changes in the workforce” for the purposes of an economic, technical or organisational reason defence will now expressly include a change in location.
- Regulation 4 (restriction on changes to terms) and regulation 7 (protection against dismissal) will more closely reflect the wording of the Acquired Rights Directive and ECJ case law.
- A transferee may sometimes wish to make redundancies following a transfer. A transferee can include pre-transfer consultation with transferring employees as part of its obligation to inform and consult in a redundancy exercise, provided that certain conditions are met. The new employer must give the transferor (the previous employer) written notice that it wishes to start consultation with the transferring workforce prior to the transfer. If the transferor agrees to this it must provide access to employee representatives, and ensure that appropriate facilities are provided to ensure constructive conversations take place.
- Organisations with fewer than 10 employees (known as micro businesses) will now be able to inform and consult directly with employees where there are no recognised and existing representatives
As regards changes once proposed that have been abandoned, the provisions in regulation 4(9) will not be changed. These enable employees to claim that they have been dismissed where there is a substantial change in working conditions to their material detriment.
Also, the regulations will not enable transferors to rely on a transferee`s ETO reason to dismiss an employee prior to a transfer (which had previously been suggested).
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