Government launches consultation on changes to TUPE

The Government has launched a consultation on proposed changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246). The consultation includes the proposal to remove the provisions on service provision changes from the TUPE Regulations. 

The Government states that it believes that the proposed changes will improve and simplify the Regulations for all parties involved. The consultation follows the call for evidence in November 2011 on the effectiveness of TUPE. 

The consultation seeks views on a number of proposals to amend the TUPE Regulations:

  • Service provisions changes
    The Government proposes to repeal the provisions on service provision changes. The TUPE legislation was amended in 2006 to bring most service provision changes (ie outsourcing, insourcing and retendering) within the scope of the Regulations. The Government proposes reversing this change. It asks for views on the length of any "lead in" period that would be required before the change comes into effect. 

  • Employee liability information
    The Government proposes to repeal the requirement for the transferor to provide employee liability information. However, it also proposes to amend the Regulations to make it clear that the transferor should disclose information to the transferee where it is necessary for purposes of information and consultation. 

  • Contractual changes, protection against dismissal and substantial changes to working conditions
    The consultation document includes proposals to amend the provisions of the TUPE Regulations that restrict post-transfer changes to employment contracts, the provisions that give protection against dismissal and the provisions concerning a substantial change in working conditions to the material detriment of the employee so that they more closely reflect the minimum requirements of the Acquired Rights Directive (2001/23/EC) and case law of the European Court of Justice. 

  • Dismissals arising from a change in the workplace
    The Government proposes to amend the Regulations so that an "economic, technical or organisational reason entailing changes in the workforce" (ETO reason) can cover changes in the location of the workforce. Currently, the meaning of "changes in the workforce" is limited, as a result of case law, to changes in the number of employees or the functions they perform. The definition of an ETO reason would be aligned with the definition of redundancy under the Employment Rights Act 1996, so that dismissals arising from a change in the place of work following a transfer will not be automatically unfair. 
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  • Collective redundancy consultation
    To avoid uncertainty about whether or not two separate obligations to consult collectively arise from the TUPE Regulations and legislation on collective redundancy consultation, the Government proposes amendments to ensure that pre-transfer consultations by the transferee with staff who are due to transfer count for the purpose of the transferee's obligation to consult on collective redundancies. 

  • Micro businesses
    The Government proposes allowing micro businesses to inform and consult employees directly regarding transfers, rather than through representatives, in cases where there is neither a recognised union nor existing representatives. 

  • Terms and conditions derived from collective agreements
    The consultation document also asks for views on limiting the future applicability of terms and conditions derived from collective agreements to one year from the transfer. 

  • Pre-transfer dismissals
    Views are also sought on whether or not a transferor should be able to rely on the transferee's ETO reason in respect of pre-transfer dismissals. 

The Government has decided not to go ahead with a proposal for joint liability between the transferor and transferee for pre-transfer employment obligations, which was considered in its response to the call for evidence. The position will remain the same, ie liability transfers to the transferee. 

Also

Transfer of undertakings The XpertHR employment law manual explains the law on TUPE. 

The XpertHR FAQs section answers questions on TUPE, including:

Good practice guide on TUPE The XpertHR good practice section provides guidance for transferors and transferees on delivering the commercial aims of a transfer without undue disruption to their business.