TUPE changes to legislation now in force

In our October 2013 edition we wrote about the governments proposed TUPE changes and it how it hoped to lay the draft regulations before parliament in December 2013.

The draft regulations were actually laid before parliament on 10th January 2013 and came into force on 31st January 2014. Most of the changes will apply from this date, with two notable exceptions:

  • Changes to the deadline for providing employee liability information will apply only to transfers taking place on or after 1st May 2014.
  • Micro-businesses will only be allowed to inform and consult employees directly for transfers which take place on or after 31st July 2014.

A reminder of some of the key changes that apply from 31st January 2014:

  • The rules on service provision changes remain, but the legislation clarifies that for this to apply, the activities that continue after the change in service provision must be “fundamentally or essentially the same” as those carried on before it.
  • The requirement to provide employee liability information is retained, however from 1st May 2014 the information will have to be given 28 days before the transfer, not the current 14 days.
  • There is now a static approach to the transfer of terms derived from collective agreements, meaning that the transferee (i.e. the new employer) can change terms derived from collective agreements one year after the transfer, provided that the overall change is no less favourable to the employee.
  • Changes in the location of the workforce following a transfer are expressly included within the scope of an economic, technical or organisational reason entailing changes in the workforce (ETO reason). This is significant in that it prevents genuine place of work redundancies from being automatically unfair.
  • The Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) will be amended to clarify that consultation which begins before the transfer will count for the purposes of complying with the collective redundancy rules, provided that the transferor (old employer) and transferee (new employee) can agree and the transferee has carried out meaningful consultation. This is significant in that it enables both employers to more fairly manage the expectations of the employees, and for the transferee, they can start their consultation sooner.
  • From 31st July 2014, micro-businesses will be allowed to inform and consult affected employees directly if there is no recognised independent union, nor any existing appropriate representatives.

The legislation does not however enable transferors (i.e. the old employer) to rely on a transferee’s ETO reason to dismiss an employee prior to a transfer (which was previously suggested as a change to the legislation).