This year has seen various changes made to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) as a result of the Collective Redundancies and Transfer of Undertaking (Protection of Employment) (Amendment) Regulations 2014 (the Amendment Regulations) coming into force earlier this year.
Whilst the Government has stated that the changes to TUPE are “good news” for employees and businesses alike and should provide more clarity, businesses need to be aware that the Amendment Regulations do make some significant changes which are likely to affect the way that transferors and transferees manage matters both before and after a TUPE transfer.
Some of the key changes are:
For there to be a “service provision change,” the activities carried on after the change in service provision must be “fundamentally or essentially the same” as those carried on before. This will have a particular impact on businesses who deal regularly with outsourcing agreements and careful thought will need to be given as to whether TUPE will apply at the end of the agreement when costing any such agreements.
One of the biggest challenges employers face when acquiring a business is the restriction on making changes to terms and conditions. Under the Amendment Regulations, changes to terms and conditions will only be void where the reason for the change is the transfer itself.
This gives employers more flexibility to “harmonise” terms and conditions following a transfer, however, it will be important to consider whether employees have scope to argue that the changes are made “by reason of the transfer” prior to making any such changes.
In practice it may not be easy to distinguish between a change that is by reason of the transfer or one that is merely connected with the transfer.
One very helpful change is that for the purpose of deciding whether there is an economic, technical or organisational reason entailing changes in the workforce, the phrase “changes in the workforce” now expressly includes a change of workplace location. This means that redundancies arising from a change of workplace following a transfer will not be automatically unfair.
It was clarified that there is a static approach to the transfer of any terms derived from collective agreements and transferees are able to change terms derived from collective agreements one year after the transfer, provided that the overall change is no less favourable to the employee.
Consultation which begins before the transfer can count for the purposes of complying with the collective redundancy rules, provided that the transferor and transferee can agree and the transferee has carried out meaningful consultation.
Transferees will need to approach pre transfer consultation carefully to ensure that they do not fall foul of their obligations under TUPE and the collective redundancy rules.
Dismissals will now only be unfair where the sole or principal reason for dismissal is the transfer itself and there is no economical, technical or organisational reason for the dismissal.
The Government has issued updated guidance on TUPE, however, in many areas it is relatively limited and businesses will need to make their own assessment of how the recent changes to TUPE affects their approach.
Nicola Smyrl is a solicitor in the Employment Law Department at Taylor Walton Solicitors, which has offices in Luton, Harpenden and St Albans and provides effective legal solutions to businesses and individuals across Bedfordshire, Hertfordshire and the South East. Nicola can be contacted on 01582 731161 or email firstname.lastname@example.org
The information in this article was, at the time of publication, believed to be a correct statement of the law. However, readers should seek specific legal advice on matters arising, and no responsibility can be accepted for action taken solely in reliance upon such information.
We will be running a series of free workshops at our Luton and St Albans offices aimed at HR professionals and business managers during which we will be discussing the practical effect of the recent changes made to TUPE and some interesting decisions of the Courts on the application of TUPE in practice – please see our website for more details: www.taylorwalton.co.uk/events