Government: No repeal of service provision changes

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Following a consultation on proposed changes to the Transfer of Undertaking (Protection of Employment) Regulations (TUPE) 2006, the government has decided not to repeal the service provision changes (SPC) rules and not to abolish the obligation on transferors to provide employee liability information, reports Harris & Co chartered accountant.
 
The government"s change of heart on their proposed repeal of SPC was in response to a majority of respondents to the consultation being against it.  The government concluded that repealing the SPC provisions would reintroduce the uncertainty about whether certain types of transfers were caught by TUPE which existed before 2006. Therefore the SPC provisions will be retained "unamended" and the current position regarding outsourcing and TUPE will continue.
 
A similarly negative reaction was given to the proposal to repeal the duty under Regulation 11 of TUPE for the transferor to provide specific information 14 days before transfer.  Accordingly the government has decided to keep the obligation but, in response to concerns about timescales, will bring forward the deadline to 28 days before the transfer. 
 
There are however several important changes to TUPE which the government will be proceeding with (see Details section below).  Although at present no firm date for their introduction has been confirmed by the government, they are expected to be introduced in January 2014.  Therefore employers involved in any TUPE transfers over the next 3 to 6 months should be aware that their obligations under TUPE could change during this period and they will need to factor this in to any planned TUPE transfers.
 
The government"s response to the consultation on TUPE sets out what changes will and will not be made.
 
The government will not:-
  • Repeal the SPC provisions.
  • Repeal Regulation 11 and Regulation 12 of TUPE (requirement to provide information about transferring employees and the enforcement mechanism).
  • Allow a transferor to rely on a transferee"s economic, technical or organisational (ETO) reasons to dismiss an employee prior to transfer.
  • Amend Regulation 4 (9) to copy out the acquired rights directive.
The government will make the following changes:-
  • Amend TUPE to reflect the case law on SPC so that in order for there to be an SPC the activities carried on after the change in service provision must be "fundamentally or essentially the same" as those carried on before it.
  • Amend Regulation 11 so that the deadline for the transferor to provide information about the transferring employees will be 28 days before the transfer.
  • Allow the re-negotiation of terms derived from collective agreements 1 year after the transfer provided the overall change is no less favourable to the employee.
  • Provide that a change in the location of the workforce can be within the scope of an ETO (so genuine place of work redundancies will not be automatically unfair).
  • Allow micro businesses (i.e. employers with fewer than 10 employees) to inform and consult directly with affected employees when there is no recognised independent union nor any existing appropriate representatives.
  • Allow pre-transfer consultation by the transferee to count for the purposes of complying with the collective redundancy rules, provided that the transferor and transferee can agree and where the transferee has carried out meaningful consultation.
  • Amend regulations to expressly provide for a "static" approach to the transfer of terms which derive from a collective agreement (i.e. only those collective agreements in existence at the date of the transfer will be binding on the transferee and not subsequent ones where the transferee is neither a party to those subsequent collective agreements nor to the bargaining process for them).
Please contact a member of our team should you require further assistance.

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