Regulations set to undergo changes

Howes Percival

2nd January 2014

Legal Briefing

WHENEVER a business is sold to another company its employees are covered by the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).  The TUPE Regulations will undergo major reform this month.  Madeline Watts of Howes Percival solicitors explains the key changes. TUPE is designed to protect employees whenever their employer's business is sold. As a consequence, there are strict limitations on what changes can be made to employees' terms and conditions after a sale and the dismissal of employees both before and after the sale. However, TUPE also applies to many outsourcing activities which are covered by specific provisions on service provision change. Following an extensive consultation about the operation of TUPE a number of changes will be made including:- * The definition of a service provision change will only apply where the activities post-transfer are 'fundamentally the same as the activities carried out previously'. * Changes to the employer's ability to vary an employee's contract of employment following a transfer, including where terms are incorporated into a collective agreement. Changes will also be made to an employer's ability to dismiss employees following a transfer. * Clarification that a change in workplace location will be covered by the main exception for post-transfer dismissal or variation in employment contracts (an economic, technical or organisational (ETO) reason) * The time limit for the transferor (seller) to provide employee liability information to the transferee (buyer) will be extended from 14 to 28 days before the transfer takes place. * Where a transferee proposes to make 20 or more employees redundant after the transfer, the transferee can consult about those proposed redundancies before the transfer occurs if the transferor agrees. * Micro businesses (fewer than 10 employees) will be allowed to consult directly with the affected employees where there is no recognised trade union or any existing employee representatives. The above reforms are designed to introduce an element of flexibility into the TUPE Regulations. The government's decision not to repeal the service provision change provisions will be welcomed by many employers as they provide some clarity as to when TUPE applies. The various other proposed amendments are also helpful to employers and will provide some useful assistance in managing a TUPE transfer.  However TUPE still remains one of the most complex areas of employment law and therefore specialist legal advice should always be sought.  

Howes Percival