It’s been around for a long time, yet the acronym TUPE still manages to strike fear in even the most discerning of employers (and lawyers). As part of the Government’s Employment Law Review, the Employment Minister, Jo Swinson, opened a consultation exercise in 2011 on reforming the TUPE regulations.
Albeit delayed somewhat, the Government has now published its response outlining the reforming package of amendments to the TUPE Regulations. The Government’s laudable ambition is to remove unfair legal risks that businesses currently face when carrying out a transfer, while also removing excessive parts of the TUPE Regulations so as to reduce the bureaucracy of a transfer.
The headline changes include:-
- the Government will allow the renegotiation of terms derived from collective agreements entered into one year after transfer. This will apply only if the overall change is no less favourable to the employee.
- following a transfer, the location of the workforce will fall within the scope of economic, technical or organisational reasons entailing changes in the workforce. This will prevent genuine place of work redundancies from being automatically unfair.
- reflecting the approach set out in case law, the activities carried out after the change in service provision must be "fundamentally or essentially the same" as the activities carried out before the transfer for there to be a TUPE service provision change.
- the TUPE process will be improved for micro-businesses by allowing them to inform and consult with directly affected employees if certain conditions prevail.
- TUPE consultation will be allowed, in certain circumstances, to satisfy collective redundancy consultation rules.
- The regulations will be amended to provide that the transferor will have 28 days to send employee liability information to the transferee, up from the current 14 day time limit.
The draft amending Regulations have not been published yet but the Government has committed to an implementation date of January 2014.
The proposed changes look set to make a transfer situation easier to manage and would seem to be much more than change for change’s sake alone. Indeed on implementation we can expect more clarity over definitions and importantly certainty over the effect of collective agreements post transfer. The possibility of combining redundancy consultation with TUPE consultation should also help solve some of the current practical challenges that can arise. Unfortunately however the reforms aren’t a magic TUPE formula and complexity will still exist even after implementation so you should continue to take advice when faced with a potential transfer.