In the world of employment law, a lot of time was spent in 2013 discussing TUPE (via Government consultation), the legislation which protects the employment of employees when the business they work for is transferred to new owners or where the contract they work on is awarded to a new supplier (e.g. where a business outsources cleaning and then changes supplier). The TUPE legislation has long been considered difficult for businesses to comply with and the commonly held view is that in implementing the EU Directive relating to TUPE, the previous Government had “gold-plated” the domestic legislation.
The outcome of the Government consultation may not have been as far reaching as many businesses would have liked. However, there are a number of changes that should be beneficial to businesses. From 31 January 2014 the following changes will come into force:
- TUPE will only apply to a service provision change if the activities carried on after the transfer are fundamentally the same as those carried out before the transfer. Therefore, if the activities are carried out in a different way, it may be that TUPE does not apply.
- If a new employer has transferring employees who have terms of employment incorporated by a collective agreement, it can vary those terms so long as the change takes place more than a year after the transfer and it is no less favourable to employees.
- More generally, employees will still be protected from new employers making changes to their terms of employment but only where the reason for the variation is the transfer itself.
- It may be easier for the new employer to dismiss employees after the transfer as employees will only be protected from dismissal if the reason for it is the transfer itself.
- Out-going employers will have to provide to the new employer employee liability information (information on the terms and conditions of employment of transferring employees) 28 days before the transfer, as opposed to 14 days.
- It will be potentially fair to terminate the employment of transferring employees on the basis of a change of work location (which will become an “economic, technical or organisational reason” – i.e. a reason for dismissal after a TUPE transfer which is potentially fair).
- Micro businesses (those with fewer than 10 employees) will be able to inform and consult with employees over a TUPE transfer directly, rather than via employee representatives, unless there are already Union representatives or elected representatives in place.
In addition, from May 2014, where a new employer proposes making 20 or more redundancies following a transfer, it can begin its consultation with employees prior to the transfer provided the out-going employer agrees.
Whilst it’s still likely to be difficult for businesses dealing with TUPE situations, the new legislation should make matters simpler and bring benefits to employers.
If you have any questions surrounding TUPE and your business, please do get in touch!