Draft legislation amending TUPE and the law relating to collective redundancies has now been published and is expected to come into force in January 2014.
The Government consulted earlier this year on proposed changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) aimed at simplifying the legislation.
The Government published its response to the consultation on 5 September 2013 which outlined a package of amendments intended to improve how TUPE works in practice.
On 31 October 2013 draft, amending legislation, the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2013 (the Regulations), was published.
What happens now?
The Regulations now need to be finalised and agreed with Ministers. The Regulations are expected to be laid before Parliament in December 2013, and to come into force in January 2014.
What are the main changes that will be introduced by the Regulations?
- The Trade Union and Labour Relations (Consolidation) Act 1992 is amended to allow a transferee to begin consultation before any TUPE transfer in respect of employees who are likely to be made redundant after the transfer. However, this is only permissible where the transferor agrees to such pre-transfer consultation. In addition, written notice must be given by the transferee to the transferor that it is electing to carry out pre-transfer consultation. Particularly in a change of contractor scenario, it remains to be seen how co-operative a transferor may be in allowing an incoming transferee prior access to the workforce for consultation purposes.
- The Regulations amend the current definition of "activities" for the purpose of service provision change so that it is expressed that these must be "fundamentally" the same both before and after any transfer. This effectively codifies existing case law.
- Current restrictions on varying employment contracts where there is a relevant transfer are relaxed for variations by reason of a transfer as long as the changes are permitted by the contact.
- It is also expressly stated in the Regulations that a change in the place of work after a transfer should be regarded as included within the term "changes in the workforce" for the purposes of an economic, technical or organisational (ETO) defence. This applies both to variations of contract and dismissals.
- Where employees' contracts of employment incorporate terms in a collective agreement as may be agreed from time to time (for example, pay rates) terms from a collective agreement which is agreed and comes into force after a transfer and where the transferee is not a party to the collective bargaining will not transfer. This codifies the Court of Appeal's "static" interpretation of TUPE which was subsequently approved by the European Court of Justice in the case of Alemo-Herron and others v Parkwood Leisure Ltd C-425/11.
- The deadline for notification of employee liability information by the transferor to the transferee is extended from the current 14 days before the transfer to 28 days before the transfer.
- Micro-businesses (i.e. those with fewer than 10 employees) will be permitted to inform and consult directly with employees where there are no pre-existing employee representatives recognised.
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