TUPE (or to give it its full title, the Transfer of Undertakings Protection of Employment Regulations 2006) is the law which requires employers who take over a business, or take over certain contracts from another employer, to take on the employees who worked for that previous employer.
At the end of January, some long-awaited TUPE amendments come into force. Here’s what is new:
Service provision changes
It will be expressly stated that, for TUPE to apply, the activities carried on after service provision changes have happened must be “fundamentally or essentially the same” as before.
Employee liability information
The new employer will have a little more time to consider the liabilities it will be taking on. That information will normally have to be handed over by the transferring employer at least 28 (rather than the current 14) days before the transfer.
Businesses employing 10 or fewer employees will be able to inform and consult with them directly, rather than having to hold elections for employee representatives.
A new employer will only be bound by collective agreements that were in place at the time of the transfer. They can’t be bound by later changes which they weren’t involved in negotiating. This will be very important for companies taking on employees from the public sector where pay is the subject of annual negotiations at national level.
Also, terms agreed in a collective agreement can be renegotiated by the employer. That’s as long as the new terms are, overall, no less favourable to the employee and don’t take effect until at least one year after the transfer.
Dismissals not necessarily automatically unfair
Dismissals will only be automatically unfair where the transfer was the reason for the dismissal (and not where dismissal was for a reason connected with the transfer), unless an economic, technical or organisational reason applies.
There could be more scope for employers to make changes to employees’ contracts after a TUPE transfer. Currently, changes can’t be made if the reason for them is the transfer itself or a reason connected with the transfer. The italicised wording will no longer apply.
A change of location, post-transfer, could be an “economic, technical or organisational reason entailing changes in the workforce”. And, in certain circumstances, consultation carried out before the TUPE transfer could count towards any overall 30 or 45-day redundancy consultation period.
There is Government guidance to come which should help organisations get to grips with the new provisions. For now, though, the new-style TUPE is being viewed in the round as good news for employers.