This year saw a raft of changes to employment law being introduced by the coalition government and 2014 will be no different with a number of measures scheduled to come into effect in the coming months. Below is a summary of the changes that are planned for the ACAS conciliation regime and the Transfer of Undertakings Regulations ("TUPE"), as well as an analysis of the impact these changes will have on employers and employees.
Compulsory pre claim ACAS conciliation
The coalition government is currently planning to introduce changes to the ACAS conciliation regime in April 2014. Under the planned changes, those wishing to bring an Employment Tribunal claim against their employer will have to take part in compulsory ACAS conciliation before being allowed to lodge a claim.
The would be claimant will be required to contact ACAS, giving their basic details and those of the employer. A conciliation officer will then attempt to promote settlement between the parties. If settlement is not reached within one month, or if the conciliator decides it is not possible, the claimant will be issued with a certificate and the claim proceeds as normal. It is worth noting that whilst contacting ACAS in the first instance is compulsory, either party can refuse to conciliate at any stage thereafter.
In terms of the time limit for bringing a claim, submission of the initial conciliation form to ACAS will stop the clock on the relevant time limit. Time will only start to run again once the certificate has been issued by ACAS.
The likely impact on employers
In some cases employers do not find out about a Tribunal claim until it arrives in the post. Many employers who are aware that a claim is likely decide to wait until proceedings are issued before taking part in any settlement discussions. The compulsory conciliation regime will alert employers to the threat of a claim at an early stage, and encourage them to consider settlement prior to a claim being issued.
With the introduction of Tribunal fees last summer, claimants should be willing to settle for a lower amount if agreement is reached prior to them incurring an issue fee. Accordingly, this change in the law should encourage settlement and reduce the amount of claims that employers have to defend.
On the other hand, the rules regarding the effect that compulsory conciliation has on the time limit for bringing a Tribunal claim are complex and will probably give rise to disputes about whether claims have been brought in time, which may increase the financial and administrative burden on employers.
The TUPE Regulations
As many will know, broadly speaking, the TUPE Regulations preserve employees' terms and conditions when a business or undertaking, or part of one, is transferred to a new employer. Until recently, the coalition government had been planning to abolish the concept of the Service Provision Change under TUPE. Broadly speaking a Service Provision Change takes place when an employer outsources a part of its business to a contractor (for example, many organisations now outsource their IT functions), re-tenders for the same services or transfers those functions back in house
The effect of TUPE applying in such a situation is to automatically transfer the employees who carry out the service or function in question to the new provider. The government were considering abolishing the SPC because it goes further than is required under EU law which, broadly speaking, requires that when a business is "transferred" (which in most cases means it is sold by means of an asset sale), the employees of that business will automatically transfer to the buyer, so long as the business has "retained its identity" following the transfer.
After consulting with employers on the proposed abolition of the application of TUPE to a SPC the government has decided that it is, in fact, a necessary evil as it provides a degree of certainty as to whether employees will transfer in the service provision change scenarios outlined above.
However, the government are planning to introduce a number of other changes to TUPE in January 2014, in particular:
- Currently there is an obligation on the outgoing employer to provide information about the transferring employees to the incoming employer within 14 days before the transfer. As of next year, that information will have to be given within 28 days before the transfer, which will give the new employer more time to consider the commercial implications of the information (for example, it may effect the price a buyer is willing to pay for a business).
- Many employers have been in the situation where, at the time of a TUPE transfer or shortly afterwards, they would like to relocate the incoming staff. Under TUPE, any dismissal of an employee for a reason connected to a transfer which is not an "economic, technical, or organisational" ("ETO") reason that necessitates changes in the workforce is deemed automatically unfair.
Currently, a change in workplace location will not qualify as an ETO reason for dismissing employees after a transfer. As a result, broadly speaking, if an employee does not agree to relocation following a transfer and is dismissed as a consequence, the dismissal will be deemed to have been automatically unfair. Planned changes to the law will provide that a change in location of the workforce can be an ETO reason for dismissal, meaning that Employment Tribunals will no longer be able to give an automatic finding of unfair dismissal in such cases.
It will therefore be possible for employers to dismiss employees fairly when they wish to relocate incoming staff following a TUPE transfer. However, as always, the employer would have to show that it was fair to dismiss the employee in those circumstances and that a fair process was followed in order to avoid a successful unfair dismissal claim by the employee.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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