In the world of employment law, a lot of time in 2013 was spent discussing TUPE (via Government consultation). This is the legislation which protects the employment of employees when the business they work for is transferred to new owners or where the contract they work on is awarded to a new supplier (e.g. where a business outsources cleaning and then changes supplier).
Some of the changes are rather legalistic, but the essence of the changes is to simplify TUPE and to reduce what has sometimes been a rather burdensome and bureaucratic process.
Following consultations there are a number of changes being introduced on January 31st, these include;
- TUPE will only apply to a service provision change if the activities carried on after the transfer are fundamentally the same as those carried out before the transfer. Therefore, if the activities are carried out in a different way, it may be that TUPE does not apply.
- If a new employer has transferring employees who have terms of employment incorporated by a collective agreement, it can vary those terms so long as the change takes place more than a year after the transfer and it is no less favourable to employees.
- More generally, employees will still be protected from new employers making changes to their terms of employment but only where the reason for the variation is the transfer itself.
- It may be easier for the new employer to dismiss employees after the transfer as employees will only be protected from dismissal if the reason for it is the transfer itself.
- Out-going employers will have to provide to the new employer employee liability information (information on the terms and conditions of employment of transferring employees) 28 days before the transfer, as opposed to 14 days.
- It will be potentially fair to terminate the employment of transferring employees on the basis of a change of work location (which will become an “economic, technical or organisational reason” – i.e. a reason for dismissal after a TUPE transfer which is potentially fair).
- Micro businesses (those with fewer than 10 employees) will be able to inform and consult with employees over a TUPE transfer directly, rather than via employee representatives, unless there are already Union representatives or elected representatives in place.
In addition to these changes, from May 2014, where a new employer proposes making 20 or more redundancies following a transfer, it can begin its consultation with employees prior to the transfer provided the out-going employer agrees.
The changes are fairly significant, and do reduce the burden on employers in some circumstances. However, TUPE remains a complex piece of legislation and employers should seek early advice on the potential impact of TUPE to any transfer of a business or service provision change.
Contact our Employment Team today for help and advice.