UK Government Publishes Response to Consultation on TUPE

by Morgan Lewis
Contact

The response to the Consultation will result in key changes to automatic employee transfer legislation, although the changes do not go as far as originally planned.

On 5 September, the UK government published its response to the Consultation on the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE Regulations). The government launched the Consultation to respond to criticism of the TUPE Regulations for imposing often impractical obligations on employers, as well as for seemingly "gold plating" the minimum European requirements. The government's proposed changes to the TUPE Regulations, which are intended to reduce the burden on employers, will be welcomed by businesses.

Background

In the UK, the TUPE Regulations will apply in certain situations to automatically transfer employees' employment from one employer to another on the same terms and conditions and with continuity of service preserved.

Broadly, the TUPE Regulations will apply in the following two situations:

  • Business or asset transfers: The sale of a business or part of a business (including assets) that will retain the same identity after the sale
  • Service provision changes: Where activities (i.e., services) are outsourced or outsourced services are brought back in house

The TUPE Regulations apply across Europe. If the TUPE Regulations apply to a business transfer or a service provision change, there are a number of consequences, including the following:

  • The existing employer is required to inform and consult with the transferring employees about the effect of the TUPE Regulations (with input from the new employer).
  • The existing employer is required to provide "employee liability information" to the new employer.
  • Liability arises for automatically unfair dismissals if employees are dismissed because of the transfer itself or for a reason connected with the transfer.

The TUPE Regulations are derived from the European Acquired Rights Directive. However, the inclusion of service provision changes in the TUPE Regulations was not required by EU law and was therefore seen as one example of the UK government going further than is required by EU law (so-called "gold plating").

Consultation

In 2011, the government announced its intention to review the TUPE Regulations to respond to the "gold plating" concerns and claims that the TUPE Regulations are overly bureaucratic. This led to a "Call for Evidence" in 2011 and 2012 and a Consultation in January 2013 on the TUPE Regulations and proposed changes. In its 5 September response to the Consultation, the government outlined the following key changes that will be made to the TUPE Regulations:

  • Service provision changes: The TUPE Regulations will be amended so that the activities to be provided following the transfer must be fundamentally or essentially the same as those provided before the transfer.
  • Changes to collective agreements: Renegotiation of collective agreements will be permitted one year after a transfer, provided that any changes made must be no less favourable to the employees. In addition, the TUPE Regulations will be amended to provide for a "static approach" to the transfer of employees' terms that are derived from collective agreements. This means that the new employer will not be bound by terms negotiated after the transfer if it is not a party to the collective agreement or involved in the bargaining process.
  • Post-transfer dismissals: The TUPE Regulations will be amended so that changes in the location of a workforce following a transfer can amount to an economic, technical, or organisational reason entailing changes in the workforce. This means that redundancies resulting from a change in workplace will not be automatically unfair dismissals.
  • Collective redundancy consultation: The Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA)—the legislation governing collective redundancy consultation—will be amended so that any collective redundancy consultation that begins pre-transfer will count towards a new employer's obligations under TULRCA, provided the existing and new employers agree on this and the consultation by the new employer is meaningful.
  • TUPE Regulations consultation: Micro businesses (those with 10 or fewer employees) will be able to inform and consult with employees directly rather than through elected employee representatives, provided there is no recognised trade union and no existing representatives.
  • Employee liability information: The time limit for providing such information will be extended to 28 days before the transfer (from 14 days).

Implications

The proposed changes to the TUPE Regulations unfortunately do not go as far as the government had originally suggested. For example, the TUPE Regulations' inclusion of service provision changes will not be repealed. The change that will be made to service provision changes (i.e., that the services must be fundamentally or essentially the same) simply follows recent case law developments and therefore may make little difference in practice.

However, it is helpful for employers to have confirmation on this and other points. For example, changing the law to allow pre-transfer consultation to count towards collective redundancy consultation will benefit new employers that know they will need to make redundancies on or shortly after the transfer date. Currently, some new employers have been carrying out pre-transfer redundancy consultations for practical and financial reasons. The change will mean that this practice is supported by legislation.

The government will now produce draft TUPE Regulations to be approved by Parliament. It is likely that the amended TUPE Regulations will come into force in early 2014.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morgan Lewis | Attorney Advertising

Written by:

Morgan Lewis
Contact
more
less

Morgan Lewis on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!