The Government`s Response on the Effectiveness of TUPE ‘Call for Evidence`

In November last year the Department for Business Innovation and Skills (BIS) called for evidence on the effectiveness of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

Following this, Clarkslegal held a round table discussion with various employers affected by TUPE to gather views and evidence on the questions raised by BIS.  Based on this discussion, we submitted a response to the call for evidence and also shared our findings with the CBI with whom we have a long standing relationship.

BIS have, this month, published its response to the call for evidence which included identification of the following key concerns raised by participants:

The current requirement to provide Employment Liability Information at least 14 days before the transfer is insufficient and should be increased.

• There may be particular issues with public sector transfers, particularly with regard to poor provision of information and complex collective agreements.
• Further guidance is needed for service provision changes particularly where there is a fragmentation of services, when deciding whether employees are assigned to the transferring group and in knowing which activities must transfer.
• Provision for harmonisation of terms and conditions is needed as employers are currently left with a ‘two tier system’ causing administrative and cost burdens.  It is suggested that this could be addressed by defining a period of time after which changes will not be viewed as being ‘by reason of’ the transfer or by allowing employers to renegotiate contracts provided they are on no less favourable terms.
• Further guidance is needed on what constitutes an “economic, technical or organisational reason entailing changes in the workforce”.   
• Greater clarification is needed in relation to how TUPE applies in insolvency situations
• There are strong views both for and against the concept of ‘joint and several liability’ of transferor and transferee in respect of pre-transfer obligations.
• Further guidance is needed on public sector pension arrangements.

Many of the concerns and suggestions expressed at our round table discussion are mentioned in BIS’s response and we would like to thank all those who contributed!

The Government will now start a process of policy design which will involve liaising with key stakeholders including employer groups, Unions and legal profession representative groups.  This will be followed by a consultation on possible changes, either through amendments to TUPE or further guidance, and we will continue to keep you updated on this as and when progress is made.