New TUPE Regulations Expected In January 2014
Since 2011 the government has sought reform of the Transform Undertakings (Protection of Employment) regulations (otherwise known as TUPE).
Following a lengthy consultation, the Government has published the outcome of the consultation and resulting draft revised regulations.
Key changes expected in the 2014 TUPE legislation include:
Collective Agreements
- Terms derived from collective agreements may be renegotiated one year after a transfer, even though the reason for seeking to change them is the transfer.
This will only be on the basis that the change is no less favourable to the employee.
- A static approach to the transfer of terms taken from collective agreements will be introduced. This is so that only collective agreements agreed at the date of transfer and not subsequent ones will bind the transferee where the transferee is neither party to subsequent collective agreements nor any negotiation process for them.
Workforce Location Changes
Changes in the location of the workforce following a transfer can be within the scope of ETOs. Some changes to contracts will also be allowed when a work place location changes. The Government believes these changes will give companies peace of mind that post-TUPE workplace changes can be considered “a change in the workforce”. As a result of these changes, redundancies will no longer be automatically classed as unfair.
Service Provision Change Rules
The SPC rule will not be repealed in the new legislation but it will clarify that activities taking place on after the change in service provision must be “fundamentally or essentially the same” as those carried on before it.
Micro Businesses
Micro businesses will be allowed to inform and consult directly affected employees without a recognised independent union or existing union representatives.
Employee Liability Information
Rules about employee liability information will be kept by the Government. The time before the transfer when information must be given to transferees is extended to 28 days.
Transferees will therefore receive information about liabilities and obligations earlier before a transfer takes place to prepare for their new employees.
Pre-Transfer Consultations
The Trade Union and Labour Relations (Consolidation) Act 1992 will be amended clarifying that a transferee’s consultation beginning pre-transfer can count towards compliance with collective redundancy rules.
The transferor and transferee must agree and where the transferee has carried out meaningful consultation.
TUPE Guidance Improvements
Businesses will benefit from improved TUPE guidance, helping them understand how a transfer can be conducted fairly and effectively.
While these changes form part of the Government’s recommendations and draft legislation, I would not expect the final legislation to differ greatly, which is expected to be implemented from January 2014.
For help with existing TUPE rules or for advice on how the changes may affect your business, please contact our Employment Law Team
Amy Hallam
Head of Employment
0114 3496989
amy.hallam@brmlaw.co.uk