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TUPE 2014 Reforms – coming to an asset transfer near you

The TUPE regulations set out information that must be provided to a buyer as part of the transfer of a business. For transfers which take place on or after 1 May 2014 the seller will have to provide Employee Liability Information (ELI) 28 days before the transfer date instead of the original 14 days. This comes as a response to the government’s findings that the current time frame of 14 days was too short and that businesses needed greater certainty of their obligations towards transferring employees. The extension addresses the government’s concern by allowing transferees to receive information earlier in the process and to plan accordingly.

By way of a reminder ELI must consist of the following:

• The identity and the age of the employees who will transfer.

• Copies of the employment contracts and service agreements of the employees effected.

• Information concerning any collective agreements in force and affecting transferring employees which will still have an effect post transfer.

• Details of any disciplinary proceedings taken against any employee or grievance brought by an employee in the two years prior to the transfer.

• Details of any legal actions taken by transferring employees against the seller in the previous two years. This must include any such potential legal actions where the seller has reasonable grounds to believe such actions might occur.

Likely impact?

Although not quite a ground breaking change,  businesses that are considering or in the midst of an asset transfer after 1 May will have to ensure that they start to collate and prepare employee information in good time to ensure they fulfil their obligations.

However, take note that once ELI has been provided, the seller is under an ongoing obligation to provide written notification of any changes. Be warned there is no prescribed time scale for providing such notifications and it is arguable that they can be provided just before the transfer itself, hence counteracting the positive impact of the 28 day time frame.

Other changes are also around the corner for employers with less than ten employees (micro-business). A common criticism of the duty to inform and consult under TUPE with employee representatives or recognised trade unions, has been that this is often not practical for small businesses. It has been proposed that it makes more sense to talk to the individuals affected directly rather than go through representatives. In response to this the government has relaxed these obligations by providing that employers with fewer then ten employees may discharge their obligations to inform and consult by informing and consulting the affected employees directly. This exemption will only apply where:

1. There are no existing appropriate representatives.

2. There is not a recognised union.

3. The organisation has ten or fewer employees.

4. The proposed transfer is to take place on or after 31 July 2014.

This for many is one of the more practical amendments to the TUPE Regulations, and will be a welcome change to small businesses looking to grow and develop in the near future.

Questions about TUPE? Get in Touch

For further information take a look at our TUPE toolkit

 

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Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further