Not only is TUPE one of the most difficult areas of employment law, it is also one of the most volatile in terms of frequently changing rules and conflicting decisions. Last month I reported a watering down of TUPE reforms and the result of the Government’s review of TUPE has now been published, setting out its plans for those reforms which are going ahead. The headline omissions are:
- – The provisions expressly applying TUPE to service provision changes (SPCs) are not to be repealed (although they will be tweaked – see below). This will no doubt be a relief to service providers who will not be lumbered with staff they have taken on from predecessors under TUPE if they now lose a contract, and a disappointment to TUPE lawyers who fancied a bit of extra litigation work!
- – The obligation to provide employee information prior to a transfer will stay, but transferors will have 28 days to do this rather than the current 14.
The following changes will be made, and it is difficult to take issue with them as measures to help businesses:
- – The definition of a SPC will be restricted to situations where the activities before and after transfer are “fundamentally or essentially the same” (in line with Metropolitan Resources Ltd v Churchill)
- – Specifying that a change in location of the business falls within the scope of the defence to automatic unfair dismissal allowed for economic, technical or organisational reasons.
- – Allowing transferees to renegotiate collectively agreed terms a year after the transfer (provided that overall, the changes are at least as favourable to the employees), and enshrining the principle that terms derived from collective agreements do not change after a transfer to an employer who is not a party to that collective agreement – reflecting the recent European Court decision in Mark Alemo-Herron and Others v Parkwood Leisure Ltd
- – Allowing micro businesses (ten or fewer employees) to inform and consult directly with employees rather than having to elect representatives (complete and utter common sense, this – making life easier for the business without taking away employee protection)
- – Giving scope for pre transfer consultation to count for the purposes of collective redundancy consultation after the transfer, provided transferor and transferee agree over consultation and the consultation carried out by the transferee is meaningful.
- – The wording of Regulation 7 will be changed to provide a narrower definition of automatic unfair dismissal, so that dismissals will be automatically unfair where the reason for dismissal is the transfer, rather than connected with the transfer.
No draft regulations are yet available, but it is expected that the changes will come into force early in 2014, and “improved guidance” will also be issued.