employment law TUPE

TUPE changes

parliamentDraft regulations for the forthcoming TUPE reforms have been published. The changes they are intended to make are:

  • – To allow a transferee to start collective consultation with representatives of employees due to be transferred about planned redundancies before the transfer takes place, if the transferor agrees. This will require a good deal of co-operation between the two if the consultation is to be meaningful, and if a sale is not yet a “done deal” a seller may be reluctant to allow it.
  • – Providing that variations connected with the transfer will be deemed void if the transfer is the reason for the variation – but not variations for a reason “connected with” the transfer. This is apparently a narrowing of the scope of the regulations, and variations will also be allowed if there is an “economic technical or organisational” (ETO) reason entailing changes in the workforce, or an otherwise void variation is permitted by the employment contract. It remains to be seen whether vague, “catch-all” variation clauses will be found to be effective in such a situation. Courts and tribunals have in the past been reluctant to accept that employers can use very wide general variation clauses to make unilateral fundamental changes in employment terms (See for example SmithKline Beecham plc v Johnson). There is also the challenge presented of drafting a variation clause allowing for a variation which would be void in law (because the reason for the variation is the transfer), were it not for that clause’s existence.
  • – Making a similar change to the provisions on unfair dismissal, so that dismissals will be unfair if the reason for the dismissal is the transfer itself, but not if the reason is merely “connected with” the transfer. There will no doubt be a good deal of litigation about when a reason is the transfer and when it is just connected with it.
  • – Confirming that as held in Alemo -Herron & Ors v Parkwood Leisure Ltd , where the terms of a collective agreement are incorporated in a transferred employment contract, changes to the collective agreement after the date of transfer will not carry through to the transferred contract, unless the transferee is a party to the same collective agreement.
  • – Providing that a change of location can be an “ETO reason entailing changes in the workforce”.
  • – Extending the deadline for notifying employee information by the transferor to 28 days before the transfer. This seems a more realistic timetable for the transferee, who has a bit more notice of whether he is buying a business with significant employee issues such as pending claims.
  • – Allowing micro businesses (those with fewer than 10 employees) to inform and consult directly with its workers rather than having to go through the palaver (or a charade) of electing workplace representatives.
  • – In the case of service provision changes, specifying that the service must involve fundamentally the same activities as those carried out previously for the Regulations to apply – in line with Metropolitan Resources Ltd v Churchill Dulwich Ltd (in liquidation) & Ors (EAT 2009).

As noted in my earlier post on the subject, these Regulations are also notable for what they do not contain, for example abolition of the service provision change rules. They will come into force on 31 January 2014.

Martin Malone

By Martin Malone

I'm a solicitor and the chief operating officer at Canter Levin & Berg. I was formerly head of the employment department.
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