UK: Changes To TUPE – What Do They Mean?

A number of significant amendments to Transfer of Undertakings (Protection of Employment) Regulations (TUPE) came into force in January 2014; the majority of these are designed to assist employers in an area that has always been complex and dogged by uncertainty.

Changes to terms and conditions

One of the greatest practical difficulties for employers was the effect of TUPE on the ability to make post-transfer changes to the contracts of employment for transferring employees. The recent amendments broaden the circumstances in which such changes can be made.

Now, changes will be void only if the transfer is the sole or principal reason for making the changes. Changes made for a reason merely connected to the transfer will not be void. Where the sole or principal reason for a change is the transfer, the changes will not be void if:

There is also now a specific provision that expressly provides that a change in workplace will be an ETO reason. However, there remains uncertainty as to the difference in practice between situations where the transfer is the sole or principal reason, and situations where the reason is merely connected to the transfer. Further, TUPE continues to render void changes that were made to contracts simply for the purpose of effecting the harmonisation of contracts following a TUPE transfer.

Service provision change

Originally, it was intended that the Service Provision Change provisions in TUPE would be removed, as they went further than required under the EU Acquired Rights Directive. However, they have been retained but modified in an attempt to clarify their application. The principal change has been to confirm existing developing case law, that in order for these provisions to apply, the service provided after the change must be the same as that carried out prior to the transfer. The issue now will be to establish whether this is the case.

Dismissals

As in the case of post-transfer changes to terms and conditions, the application of the automatic unfair dismissal provisions has been limited to those cases where the transfer is the sole or main reason for the dismissal, and not where the dismissal is for a reason connected with the transfer. Even where the transfer is the sole or principal reason, the dismissal will not be automatically unfair if there is an ETO reason entailing changes in the workforce (e.g. redundancy and now, expressly, relocation).

The inclusion of an express provision relating to relocation means that employees will no longer be able to rely on Regulation 4(9), which provides that employees who are subject to substantial detrimental changes to their working conditions can treat themselves as automatically unfairly dismissed.

It remains to be seen what effect these changes have in practice, but it seems likely that in most instances TUPE will remain a difficult area for employers.

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.