The government has recently published its response to the consultation on proposed changes to the Transfer of Undertaking (Protection of Employment) Regulations 2006 ("TUPE").

The biggest news is that the proposed scrapping of the service provision change transfer will not take place.   Although this means that the UK legislation may continue to "catch" more transfers than is required by the European legislation, it has the advantage of providing a greater level of certainty.  The legislation will confirm that activities pre-and post-transfer must be "fundamentally or essentially the same" as those carried on before it. This echoes the position found in case law.

The other main changes are as follows:

  • The transferor will have to provide employee liability information 28 days before the transfer, rather than the current 14 days.
  • Changes in the location of the workforce post-transfer will count as an ETO reason.  This will prevent genuine place of work redundancies from being automatically unfair.
  • Changes to employment terms and dismissals will only be caught by TUPE if the "transfer itself" is the "reason" for the change.   This is narrower than the current "reasons connected with the transfer", although the government will issue further guidance on how the new wording will work. 
  • Employers will be allowed to make unilateral changes to employment terms if they could have made the changes under the contract had TUPE not applied. 
  • Transferees will be allowed to change terms derived from collective agreements up to one year after the transfer,  provided that the overall change is no less favourable to the employee.  In addition, terms will be "static", i.e. they will not change when the collective agreement between the transferor and its remaining employees changes.
  • "Micro" businesses with fewer than 10 employees will be allowed to inform and consult affected employees directly, provided there is no recognised union or existing representatives.
  • Under the rules for consulting on a collective redundancy consultation,  it will now be permissible for the collective consultation to begin pre-transfer.

Proposed changes that will not be put in place include the following:

  • Employees will still be able to claim that they have been dismissed where there is a substantial detrimental change to their terms and conditions.
  • Transferors will still not be able to rely on a transferee's ETO reason to dismiss an employee before the transfer.

The government has informally confirmed that the changes are likely to be put in place in January 2014.

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