In January, we reported that the Government had issued a call for evidence on the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) and how they affect businesses. One of the Government’s proposed changes was to repeal the ‘service provision change’ aspect of TUPE.
The Government has now published its response to this consultation, and has decided not to abolish the service provision change in TUPE. Instead, they intend to amend the service provision change in TUPE to reflect the case law which has developed since the introduction of the service provision change provisions in 2006. It is the intention therefore that the service provision change provisions will only apply if, following the transfer, the service provision in question must be “fundamentally or essentially the same” as those carried on before it. This will not make it any easier to determine whether or not there is a TUPE transfer, but the Government has committed to producing improved guidance on TUPE which may help to clarify things.
There are also some more technical amendments proposed, including allowing for the renegotiation of terms of employment which derive from a collective agreement (not individually negotiated terms) even where the change is linked to the transfer, provided that the overall change is no worse for the employees affected. There is also a proposal to allow micro businesses (ie those with less than 5 employees) to consult direct with employees on a proposed transfer where there is no recognized trade union, and also a requirement to provide employee liability information (that is details of employees transferring) to the incoming new employer 28 days before the transfer, rather than 14 at present.
TUPE looks as though it will remain as complex and uncertain as ever, and employers who are likely to be subject to a transfer, either as a transferor or a transferee, should seek advice at an early stage in the process.
We have years of experience of dealing with all aspects of TUPE. If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).
Please note that this update is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.