Tag Archive: employee liability information

New TUPE regulations published

Clare Gregory, a Partner in our Sheffield office, comments: With just over a fortnight to go until they come into force, the Government has now made, and published, the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 (“Regulations”).  They will take effect on 31 January 2014. A copy of the Regulations is available here.

The Regulations reflect the relatively conservative reform of TUPE with which the Government has decided to proceed after widespread concern about its original proposals. Nonetheless there are some important changes of which employers need to be aware.

Pre-transfer consultation

The Regulations provide that, in collective redundancy situations, a transferee may consult, or start to consult, with the relevant representatives before the transfer takes place.  The transferor must agree and the transferee must give written notice to the transferor. The transferee can cancel its decision to consult pre-transfer at any time by written notice.  In practice, this change may prove to have little impact; many businesses already choose to consult about post-transfer redundancies before the transfer takes place. However, there is no doubt that having a clear legitimate basis on which to do this will provide businesses with welcome certainty and may assist transferees to make cost-cutting measures more efficiently post-transfer.  Individual consultation is, however, still likely to be required to take place post-transfer.

Changes to terms and conditions post-transfer

The Regulations continue to provide that any purported variations to contracts of employment where the reason, or principal reason, for the variation is the transfer will be void. However, the Regulations provide for two exceptions to this (1) where the sole or principal reason for the variation is an economic, technical or organisation reason entailing changes in the workforce, provided that the employer and employee agree the variation (ETO defence); or (2) the terms of the contract permit the employer to make the variation.  

These changes are an attempt to assist transferees to harmonise their employees’ terms and conditions, which, until now, has been a significant problem in practice. However, the new Regulations are not without their difficulties and arguably are in breach of ECJ case law which suggests that any variations by reason of the transfer are prohibited by the Acquired Rights Directive.  The Government is expected to issue detailed guidance in this area, but, ultimately, until cases come before the UK courts the extent to which employers can rely on these provisions to facilitate post-transfer harmonisation remains uncertain.

Change in location is a “change in workforce” for the purposes of the ETO defence

The Regulations expressly provide that ‘changes in the workforce’ provided for in the ETO defence include a change to the place where employees are employed.  This is a welcome change to the legislation, preventing genuine place of work redundancies from being automatically unfair.

Renegotiation of terms derived from collective agreements

The ongoing effect of collective agreements has been the subject of recent case law in the UK. The Regulations therefore provide welcome certainty that no provisions contained in a collective agreement agreed after the date of the transfer, and where the transferee is not party to the collective bargaining, will transfer. The new Regulations also provide that terms and conditions incorporated from a collective agreement may be varied after a period of one year post-transfer, provided that the terms are no less favourable to employees overall.

Employee liability information

The Regulations extend to 28 days (from 14) the deadline for a transferor to provide employee liability information to the transferee. This change should assist transferees and better meet their commercial needs by enabling them to have important employee information earlier in the business transfer process.  This change applies to TUPE transfers which take place on or after 1 May 2014.

Micro-businesses permitted to consult employees directly

Where an employer employs fewer than 10 employees and there are no appropriate trade union or employee representatives, the employer may consult with the employees directly.  This is likely to be welcome news for smaller employers, significantly reducing the administrative burden of electing representatives.

Summary

The new Regulations contain some useful provisions for employers.  However, until cases start to come before the UK courts the full extent of the changes will remain uncertain.  In particular, transferee employers should remain cautious about harmonising terms and conditions of employment and take advice before implementing any changes.

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