TUPE Reform – January 2014

7 November 2013

The government has proposed certain amendments to the Transfer of Undertakings (Protection of Employment) Regulations 2006. Whilst these changes are not quite as wide-reaching as originally anticipated, they are nevertheless quite substantial.

The proposals would take effect from January 2014 and would:

  • allow the renegotiation of terms derived from collective agreements one year after the transfer, even if the reason for seeking to change them is the transfer, provided that overall the change is no less favourable to the employee;
  • provide expressly for a static (not dynamic) approach to the transfer of terms derived from collective agreements i.e. the terms that transfer are those that are in place at the date of the transfer ­ not changes that come into effect post-transfer (because of collective bargaining);
  • provide that changes in the location of the workforce following a transfer can be within the scope of economic, technical or organisational reasons entailing changes in the workforce, thereby preventing genuine ‘place of work’ redundancies from being automatically unfair;
  • amend Regulation 4 (restriction on changes to terms) and Regulation 7 (protection against dismissal) to bring them closer to the language of the Acquired Rights Directive;
  • reflect the approach set out in the case law (OCS v Jones, Nottinghamshire v Hamshaw and Johnson v Campbell), namely 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;
  • allow micro-businesses to inform and consult directly with affected employees when there is no recognised independent union, nor any existing appropriate representatives; and
  • extend the time before the transfer when Employee Liability Information must be given to the transferee from 14 to 28 days.

The government will also amend the Trade Union and Labour Relations (Consolidation) Act 1992 to make it clear in statute that consultation which begins pre-transfer can count for the purposes of complying with the collective redundancy rules, provided that the transferor and transferee can agree and where the transferee has carried out meaningful consultation.