Reform of TUPE 2006

As of the end of January changes were made to the Transfer of Undertakings (Protection of Employment) Regulations 2006. The most significant changes to the current provisions are:

• whilst ‘service provision change’ will remain one of the two scenarios triggering a TUPE transfer (the other being an asset transfer) the services carried on after the change must be “fundamentally or essentially the same” as those that were carried on before in order for TUPE to apply;
• employee liability information will need to be provided by the transferor to the transferee within 28 days rather than 14 days before the transfer. (This applies to transfers after 1 May 2014);
• Dismissals in connection with the transfer will remain an automatically unfair dismissal unless there is an economic, technical or organisational reason (ETO reason) entailing changes in the workforce. This is the same as before, however, the ETO reason is extended to cover changes in location making it easier for the transferee to make change of location redundancies;
• transferees will be allowed to renegotiate collectively agreed terms one year after the transfer (provided the changes are no less favourable to the employee);
• a transferee will not be bound by any terms negotiated collectively after a TUPE transfer where the transferee is neither a party to those subsequent collective agreements nor party to the bargaining process for them. This confirms that the “static” approach applies to terms derived from collective agreements; and
• micro-businesses (with less than 10 employees) will be allowed to inform and consult with their employees directly where there is no recognised independent union or existing appropriate representatives. (This provision will apply from 31 July 2014).

In addition, the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) will be amended to clarify that consultation on collective redundancies can start before the TUPE transfer, provided the transferor and transferee agree and the transferee still carries out meaningful consultation.

For more information, help or advice please contact our Employment Team on 0191 211 7777.