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TUPE reforms – storm in a tea cup?

In an attempt to address the underlying problems with the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006), the government has now published its third and final proposals for amendment.

As with many government proposals, we are promised the world and the reality of the drafting falls somewhat short of the radical changes expected. Nevertheless, some things are changing, with the amended legislation expected to come into force in January 2014. Here is a brief summary of the key changes:

1.) The application of TUPE to a service provision change (“SPC”) is here to stay after all, however an amendment to the definition of SPC will mean that the rules will only apply where the activities carried out by the new contract are “fundamentally the same as the activities carried out previously”. (Draft regulation 5).

2.) The requirement to provide employee liability information also remains, with the deadline for compliance changing from 14 days to 28 days before the transfer. (Draft Regulation 10).

3.) The decision in Parkwood Leisure Ltd v Alemo-Herron is now enshrined in Draft Regulation 7 which confirms the static approach applied to collective agreements. However 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 employees. (Draft Regulation 6(1)).

4.) A change in the place of employment will now be an ETO reason for the purposes of TUPE. (Draft Regulation 6)

5.) Employers will be permitted to consult directly with employees in relation to a relevant transfer where there is no recognised independent union, nor any existing representatives and fewer than 10 employees. (Draft Regulation 11).

6.) Dismissal of an employee under Regulation 7 of TUPE 2006 will now only be automatically unfair if the reason for the dismissal is the transfer itself. The removal of “a reason connected with the transfer” attempts to limit the scope in which dismissals under Regulation 7 will be automatically unfair.

7.) An amendment to Regulation 4(5) of TUPE 2006 confirms that a variation in contract will not be automatically void even if the reason for the variation is the transfer itself if “the terms of that contract permit the employer to make such variation”. (Draft Regulation 6(1)(b)).

So there you have it, not quite the radical overhaul initially anticipated, but some useful tweaks for employers nevertheless. We shall see how case law shapes and interprets the new changes and will update you further.

 

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