Welcome to this HR Blast! In a quick and easy to read Q&A style, we’re updating you on the new changes to TUPE legislation.
As we all know, this area is a complete minefield and whilst there had been high hopes that the TUPE Regulation changes would bring clarity to a number of ambiguous areas, unfortunately we have not found this to be the case. That said, important changes have still been made, nine to be exact, and with this in mind, we have broken down the changes into bitesize nuggets for you.
For those with a real thirst to find out the nitty gritty of these changes, we highly recommend that you review the ACAS leaflet that details the changes to the TUPE legislation and which we refer to throughout our guidance…
TUPE means the Transfer of Undertakings (Protection of Employment) Regulations and on 31st January 2014, new regulations came into force which updated the 2006 Regulations, affecting all transfers which take place on or after 31st January 2014 (unless stated otherwise in our Blast).
TUPE applies when a business is sold, activities are outsourced or brought back in-house.
- What is the first change which the regulations have introduced?
Change number 1 is that following a transfer, the activities should remain ‘fundamentally the same’.
The two main situations when TUPE may apply to a business are:
- Business transfers – however change number 1 won’t affect this
- Outsourcing and contracting – this is where the change applies
The Regulations state that for TUPE to apply the activities being carried out before and after the transfer should be fundamentally the same.
Page 5 of the ACAS leaflet provides some good examples of when this is likely/unlikely to apply and we would be delighted to talk these through with you.
- What is the second change which the regulations have introduced?
Under the 2006 Regulations, changes to terms and conditions of employment for a reason ‘connected to the transfer’ were invalid. However change 2 now removes this.
Changes may still be valid however:
- If the sole or principal reason is “Economic, Technical or Organisational” (also known as ETO) “reason entailing changes in the workforce” and provided that the employer and employee both agree the change.
- If the terms of the contract would have allowed the employer to make the change anyway, or a new development arises.
- What is the third change which the regulations have introduced?
A change in a workplace location may now be considered as an ETO reason.
In our experience, a common change in transfer situations is a change to the workplace location and previously this was a complex issue to navigate for businesses, however with these amendments, thankfully it is specifically stated that such moves may now be considered as a fair ETO reason.
- What specifically do the fourth and fifth changes refer to?
Changes number 4 and 5 refer to collective agreements.
Change 4; terms and conditions from collective agreements may now be renegotiated after one year, provided that the overall contract is no less favourable to the employee.
Change 5; in some circumstances contractual changes arising from new collective agreements agreed by the outgoing employer are not required to be incorporated after a transfer.
This will be a breath of fresh air for businesses transferring in employees who find themselves overwhelmingly bound by terms and conditions that they had no involvement in setting.
- What does the sixth change refer to?
The sixth change refers to dismissals and/or redundancies due to the transfer. An employee will be automatically unfairly dismissed if the sole or principle reason for the dismissal is the transfer.
Previously the regulations specifically stated that dismissing for a reason ‘connected with the transfer’ would trigger automatic unfair dismissal too, therefore the regulations have relaxed this area ever so slightly.
However care should be taken! If you have any doubt, please do always give us a call and we would be only too happy to talk you through it in practical terms, you can also refer to page 11 of the ACAS booklet.
- What is the seventh change?
Redundancy consultation can begin before the transfer if both employers agree. Redundancy and TUPE consultation can therefore run concurrently. This is a positive change in our book, as it enables employees to be informed and consulted about what is going on as soon as possible, rather than being forced to wait for the conclusion of the TUPE process.
However, please beware! Employers should not make selection for redundancy before the transfer takes place.
- What does the eighth change refer to?
The eighth change refers to employee liability information.
Information about transferring employers should be given earlier. It was previously 14 days before the transfer, now it should be no less than 28 days before the transfer. On so many occasions, we see key data being transferred at too late a stage to an incoming employer therefore these regulations should give businesses more piece of mind that they will get the data they need.
Unlike the other changes, these amendments apply to transfers which take place on or after 1 May 2014.
- Finally what is change nine?
Thankfully, a common sense approach has been adopted to the ninth change, in that businesses with fewer than 10 employees are not required to invite the election of representatives for consultation purposes if no existing arrangements are in place. This should help reduce needless process steps and paperwork for smaller businesses where employee numbers are so small that they are unlikely to need or want staff representation.
Unlike the other changes, these amendments apply to transfers which take place on or after 31 July 2014.
Have a question we haven’t answered? Is your head still in a spin with the complexity of it all? Then please contact us!
TUPE remains an absolute minefield and we recommend that you always seek advice before action is taken.
The information contained within this article is for general guidance only and represents our understanding of employment and associated law and employee relations issues as at the date of publication. Jaluch Limited, or any of its directors or employees, cannot be held responsible for any action or inaction taken in reliance upon the contents. Specific advice should be sought on all individuals matters.