The new TUPE Regulations, which amend TUPE 2006, have now been laid before Parliament and will come into force on 31 January 2014. The full name of the new regulations is a bit of a mouthful: the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014.
The new regulations are broadly similar to the draft regulations published in October last year, and which we reported on here. However, there are some notable differences:
- In relation to post-transfer changes to terms and conditions and dismissals, the draft Regulations had referred to the transfer being the ‘reason’ for the change/dismissal. The finalised Regulations now refer to the transfer being the ‘sole or principal reason’, which reflects the existing TUPE terminology and is presumably aimed at avoiding confusion on this point.
- The changes in relation to employee liability information (see below) will only apply to transfers that take place on or after 1 May 2014 and not 30 April as originally proposed.
- The changes to the informing and consulting duties of microbusinesses (again, see below) will only apply to transfers that take place on or after 31 July 2014.
Below is a reminder of the changes the new regulations will introduce:
- Redundancy / TUPE consultation - the provisions of the Trade Union and Labour Relations (Consolidation) Act 1992 will be amended to allow a transferee to carry out collective redundancy consultation with all affected employees (including the transferring employees) prior to a TUPE transfer, in respect of any proposed post-transfer dismissals. This is subject to the transferor’s agreement.
- Service Provision Changes - in order for there to be a TUPE transfer by way of service provision change, the regulations now expressly state that the services which transfer must be “fundamentally the same” as the activities carried out pre-transfer.
- Post-transfer changes to terms and conditions - such changes will now only be void if the sole or principal reason for the change is the transfer itself, rather than for a reason connected to the transfer. The exemption to this provision remains when an economic, technical or organisational reason entailing changes in the workforce (“ETO reason”) exists. Further, a change will now also be permitted if it is because of the transfer, but the terms of the contract permit the employer to make the change. Finally, in respect of terms which are contained in a collective agreement, changes to such terms will not be void if made at least one year after the date of the transfer, and if, overall, the employees’ terms and conditions are no less favourable than those which applied before the variation.
- ‘Static’ approach to collective agreements - when it comes to terms and conditions contained within a collective agreement, only the terms in existence at the date of the transfer will be binding on the transferee. Post-transfer changes to those terms will not be binding on the transferee if the transferee is not a party to the negotiation of those changes.
- Protection against dismissal - a dismissal will only be automatically unfair (and liability passes to the transferee) if the sole or principal reason for the dismissal is the transfer itself, rather than a reason connected to the transfer. The exemption to this provision remains when an ETO reason exists, and the new regulations provide that a dismissal that is for an ETO reason will, for the purposes of the Employment Rights Act 1996, be potentially fair as it will be regarded as either a dismissal for redundancy (subject to satisfying the statutory definition of redundancy) or a dismissal for “some other substantial reason” justifying dismissal.
- Change in workplace location - any dismissals or changes to terms and conditions arising from a change in the location of the workforce, will be capable of being an ETO reason with the result that any dismissals would not be deemed to be automatically unfair (although ordinary fairness principles would still apply), and changes to terms and conditions would not be void.
- Employee Liability Information - the time period within which a transferee must provide employee liability information has been increased from ‘no less than 14 days before the transfer’ to ‘no less than 28 days before the transfer’. This change will apply to transfers which take place on or after 1 May 2014.
- Microbusinesses - businesses with fewer than 10 employees will be permitted to inform and consult directly with employees, rather than the current requirement to inform and consult with union or employee representatives. This change will apply to transfers which take place on or after 31 July 2014.
The TUPE Amendment Regulations 2014 can be accessed here.
BIS has published new TUPE guidance which can be accessed here.
If you have any questions or would like to discuss, please contact the Employment Team.