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New TUPE regulations published

The Government has now published the new TUPE Regulations which are intended to come into force in January 2014.

The Government has now published the new TUPE Regulations which are intended to come into force in January 2014.  These follow the consultation process earlier this year, to which we responded following discussion with many of our clients.  The Regulations implement what the Government said it would do in their response to the consultation which we alerted about in September.  The TUPE Regulations cover the transfer of staff between employers when undertakings, contracts and activities are transferred.

The detail

The Regulations will now be laid before Parliament and are intended to come into force in January.  It is unusual for Regulations to be amended once presented, so after some years of potential changes being proposed these are likely to be the changes we actually see to the law itself.  The Regulations tweak the current law rather than replacing it.

When the new Regulations come into force, the changes will be:

  • If you have staff transferring to another organisation you will be required to provide the basic required information about the transferring staff (known as the employee liability information) at least 28 days prior to the transfer occurring (rather than the current 14 days).  The current exception will remain which allows this information to be provided later where special circumstances make it not reasonably practicable to do so as far ahead of the transfer. There will be a three month lead-in period before this change applies (so for transfers occurring from April 2014 onwards);
  • It will be possible for you to commence collective redundancy information and consultation with elected employee-representatives before staff actually transfer to you.  This consultation will count towards the minimum 30 day period of redundancy consultation where there is a proposal to dismiss 20 or more employees within 90 days (or the minimum 45 day period where 100 or more dismissals are proposed). This only applies if the pre-transfer employer agrees (ideally in writing) to you doing so, and the dismissals will need to occur post transfer date. It will also be possible to comply with the obligation to notify the Secretary of State by filling in the HR1 form in these circumstances;
  • Whilst the TUPE service provision change rules will still apply, they will only do so where the activities which are carried out post-contractor change “are fundamentally the same as the activities carried out previously”.  This change uses terminology similar to current case-law, but it may become a point of argument and dispute where the application of TUPE is contentious;
  • The rules governing dismissals which may relate to the transfer will be altered to make them slightly more employer-friendly.  A dismissal will only be automatically unfair if the reason for the dismissal is the transfer itself (rather than one connected with it).  Where there is a change in the place of work of the employees that will be stated to fall within the meaning of “Economic Technical or Organisational reason entailing a change in the workplace” (when that is only currently the case if there is a change in the numbers or functions of employees). There will be other amendments to the ways in which the rules around ETO dismissals work so that they will be more likely to be for a fair reason;
  • The rules which prohibit changing employment contracts will be slightly relaxed so that changes are only void if the reason for the change is the transfer itself (rather than one connected with it), and variations will be allowed where the employment contract itself permits it;
  • There will be a new provision which says collectively agreed terms can be varied at least one year after the transfer as long as when the whole contract is considered together the employee’s terms and obligations are no less favourable. The new law will also restate current European case-law so that a post-transfer employer will not be obliged to apply changes to collectively agreed terms agreed after the transfer, if it is not part of the collective bargaining body (as may for example be the case where employees transfer to private employers from local government or the NHS); and
  • Organisations with fewer than ten employees will be able to inform and consult employees directly about the transfer, they will not have to provide them with an opportunity to elect representatives.

What does this mean for me?

The longer period for the provision of employee information will be welcomed by many and is one to watch if you face short periods between contract change and transfer.  It is fair to say that the other changes do not represent a fundamental change to TUPE and when it applies. For many of you it will not change what occurs when TUPE does apply. However for those of you who frequently deal with staff transfers or where you may need to consider some of the more complex issues which can arise with tendering for contracts involving staff or having staff transfer, the detail may turn out to be important.

Comment

The change to the wording on “activities” means that you may need to be more careful and seek advice where there might be arguments about whether TUPE applies.  The remaining changes may on occasion help with certain situations you face, however the constraints of European law mean that their real effectiveness may be limited.  They might open some opportunities for novel and different approaches and please do talk to us if you think they might help you, but it is likely we will have to await some test cases before we really find out how much impact they have.

If this raises any issues for you or your organisation, please speak to your usual contact in the Weightmans' employment team. You can also contact Phil Allen – Partner at Weightmans on 0161 214 0504 or phil.allen@weightmans.com