Member Article

TUPE change is good news for micro businesses involved in takeovers and mergers

Making micro businesses exempt from TUPE will help speed up the economic recovery at the lower end of the market while maintaining employee trust according to HR experts High Performance Consultancy.

The national human resources provider, based in Liverpool, welcomed changes which came into force this week removing the need for micro businesses to consult with appointed employee representatives when they are involved in merging with or being acquired by another business.

TUPE is designed to protect existing employees, preserving the terms of their contract and preventing them from being fired as part of the process. Those rights remain unchanged, but the burden of a formal consultation process has been lifted for businesses employing fewer than 10 people with a turnover under £2 million

“This alteration to the TUPE regulations removes another of layer of red tape which is a good thing,” said senior HR advisor at HPC Eluned Ward.

“By allowing employers to engage with employees throughout the process in a way that fits their working environment TUPE situations can be managed much more smoothly and effectively.

“This will help encourage businesses to grow. It will support the economic recovery from the bottom-up as successful micro-firms find it easier to merge to create larger companies generating jobs and investment.”

But HPC warned owners of micro businesses that the removal of this restriction means good communication with staff is even more important.

“One of the biggest failures of change is poor communication,” said Eluned. “By allowing employers to have the conversations without having to appointment employee representatives first, it is possible to retain a level of trust between the employer and employee.

“This is important as in these businesses often the employer and employee work very closely together and it under the old regulations it could seem hostile to suddenly introduce a layer of strict formality.

“Very often, when staff go through such formal processes, the complaint is ‘why do we have to go through this’ or ‘can’t you just tell me’. Now these employers can do just that.”

The change should not be seen by employers as a way to avoid speaking to employees however.

“The employer still need to make sure employees are informed as per the TUPE regulations,” she said, “If they are poor communicators, pertinent information could be missed which would open the door for employees to file a protective award claim.

“Very often in micro business, the owners would have already been having conversations with the staff about the developments but they need to make sure they keep every employee informed in line with the TUPE regulations.”

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