Partner Article

The TUPE reforms and what they mean for businesses

In January 2013, the Government put forward a number of proposals intended to make the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) more business-friendly – making transfers ‘easier for all concerned’.

One of the main themes of the consultation process was to remove any ‘gold plating’ in the Regulations, writes Chris Davies, professional support lawyer at Gateley.

This meant they addressed nothing more than what was required under European legislation governing transfers. The most significant of the suggested changes was the repeal of those parts that expressly provided service provision changes were within the scope of the regulations. This would have meant that where a contract was lost to carry out services such as cleaning or security, the employees on that contract would not automatically transfer to the new service provider.

In September, the Government published its response to the TUPE consultation process. The contents came as a shock to many. From the start of the consultation process, it highlighted that service provision changes were expressly covered by TUPE and this was more than was required under the European law.

However, as a result of the feedback received during the consultation, the Government has decided not to repeal this part of TUPE. The ‘gold plating’ will remain. Only the wording will change to clarify that the activities carried out after the change in service provision are ‘fundamentally or essentially the same’ as those carried out before.

Some of the other proposals for change are going ahead, however. These include: allowing for collective redundancy consultation to take place before the transfer; narrowing the restrictions on changing terms and conditions following the transfer; providing that where there is a change of location, redundancies will not be deemed automatically unfair; and allowing businesses with less than 10 employees to inform and consult directly with affected employees when there is no recognised independent union, rather than having to elect representatives.

While it had been proposed that the transferor’s duty to provide information regarding its employees should be scrapped, the response confirms this duty will remain.

It has arguably been strengthened, as the deadline by which the information has to be provided to the transferee is to be moved from 14 days to 28 days before the transfer.

But will it mean changes in practice? The judiciary has interpreted TUPE as applying only to where a team has been deliberately organised to meet a particular client’s requirements and where the activities post-transfer remain the same.

For example, in one case it was found that TUPE did not apply where the ethos of the service changed. Arguably, the change in wording may – if anything – lead to the judiciary feeling able to interpret TUPE as applying in more situations, rather than less.

The Government intends to lay the new regulations before Parliament in December 2013, with a view to implementation in January next year. However, transitional provisions may mean the changes will not actually become effective until later in the year. Watch this space!

This was posted in Bdaily's Members' News section by Gateley .