New TUPE rules

Changes to the Transfer of Undertakings (Protection of Employment) regulations (TUPE) due to come into force at the end of this month represent ‘tinkering’ around the edges rather than root and branch and reform originally envisaged, a senior law expert has said report Harris & Co accountants Northampton.

Croner employment law expert Stuart Chamberlain said:

‘The original intention to scrap the Service Provision Change definition of a transfer has been withdrawn and many important provisions of TUPE 2006 remain as before – notably, the standard definition of a transfer and the duty to inform and consult appropriate representatives.’

The main changes to the legislation are that the new employer will be able to begin consultation before any TUPE transfer in respect of employees who are likely to be made redundant after the transfer, subject to a number of conditions – mainly that the old employer agrees to the consultation.

Activities before and after the transfer must be ‘fundamentally the same’ to satisfy the new legal definition of a Service Provision Change.

The new regulations give greater scope to change terms and conditions and avoid automatically unfair dismissals. The protections for employees only applies where the change or dismissal in question is by reason of the TUPE transfer itself, rather than for a reason connected to the transfer as previously.

In addition, variations are allowed as long as the changes are permitted by the contract. Where there is a change in the place of work after a transfer, any redundancies as a result of the change are no longer automatically unfair.

The new employer is permitted to make changes to collective agreements after 12 months, provided the terms and conditions are no less favourable to employees. New employers are, however, bound by the terms (eg, pay rates) that come into force after the transfer and where they have not been a party to the collective bargaining.

Micro-businesses (fewer than 10 employees) will be permitted to inform and consult directly with employees where there are no pre-existing employee representatives recognised.

The deadline for notification of employee liability information by the transferor to the transferee is extended from the current 14 days before the transfer to 28 days.

Chamberlain said:

‘In general the amendments can be seen as business-friendly; however, some of the amendments lack clarity. This will certainly provide further opportunity for courts and tribunals to interpret the legislation.’