On 17 January 2013, the Government made a number of announcements in relation to its on-going employment law reform. One of those announcements was a consultation on proposed changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). This consultation follows a call for evidence on the effectiveness of TUPE which concluded in September 2012.
The proposed amendments to the TUPE Regulations include:
- Repealing the “service provision change” provisions. This is the most significant change proposed as it repeals the provision under which contracting out, contracting in and retendering exercised were expressly brought within the scope of TUPE. This change is said to be in response to business concerns that the implementing Directive is ‘gold plated’ within the TUPE Regulations and that they may have an anti-competitive effect in that outgoing employers may use a service provision change as a means of keeping only the employees they wish to retain and transferring those they wish to lose.
- Removing the obligation for the outgoing employer to provide employee liability information but making it clear that this should be disclosed where this is necessary for either party to comply with their information and consultation obligations.
- Amendments to the provisions restricting changes to terms, providing protection against dismissal and concerning a substantial change in working conditions to reflect the wording of the underlying Directive and ECJ case law more closely.
- Amendments to the meaning of “entailing changes in the workforce” to include changes in location of the workforce. This would align the meaning of ‘economic, technical or organisational reason entailing changes in the workforce’ with the definition of redundancy under the Employment Rights Act 1996 so that some dismissals involving a place of work redundancy are capable of being fair for unfair dismissal purposes.
- Provisions that the incoming employer can consult on collective redundancies with the transferring employees prior to the transfer.
- Allowing micro businesses to inform and consult with their employees directly in circumstances where there is neither a recognised union nor existing representatives.
Reponses to the consultation are due by 11 April 2013 and if the proposed changes go ahead, the Government intends to introduce them in October 2013.