The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) apply to any size of business and protect the employment rights of employees when their employer changes as a result of the relevant transfer of a business or a part of one. They implement the EC Acquired Rights Directive.
The Regulations introduced:
The Regulations place a duty on both the transferor and the transferee employers to inform and consult representatives of their employees who may be affected by the transfer with a view to seeking their agreement to the measures. The transferor and the transferee are jointly and severally liable for any failure to inform and consult, thus ensuring that each has a clear incentive to comply with the requirement.
Amidst concerns that the 2006 TUPE Regulations as implemented had not achieved what they were designed to do, and claims by businesses that they unhelpfully ‘gold-plated’ the Acquired Rights Directive and were overly burdensome and bureaucratic, the Government consulted on proposed amendments.
As a result, the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 came into force on 31 January 2014. As well as amending TUPE, they also make changes to the provisions relating to collective redundancies in the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).
TULRCA is amended to allow a transferee employer who is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days to elect to begin consulting representatives of affected employees, including transferring employees, about the proposed dismissals before the transfer takes place, provided the transferor agrees to it and is given written notice of the transferee’s intention.
The Government decided not to repeal the TUPE service provision change rules introduced in 2006. However, the Regulations clarify that for there to be a service provision change, the activities to be carried on after the transfer must be ‘fundamentally or essentially the same’ as those carried on before it took place.
The restrictions on varying the terms and conditions of employment contracts when there is a TUPE transfer are relaxed. The Regulations retain the existing principle that any variation is void if the sole or principal reason for it is the transfer, but contractual variations will be allowed if the sole reason for the variation is an ETO reason entailing changes to the workforce, provided the employer and employee agree that variation or the terms of the employee’s contract expressly permit the employer to make such a variation.
A dismissal for a reason connected with the transfer of a business or undertaking is automatically unfair unless the employer can show that the sole or principal reason for the dismissal was an ETO reason entailing changes in the workforce. The Regulations amend the meaning of ‘changes in the workforce’ to include a change to the place where employees are employed to carry out business for their employer, thereby preventing genuine place of work redundancies from being automatically unfair.
Where the contracts of employment of employees who have transferred under TUPE incorporate provisions of collective agreements as may be agreed from time to time, such agreements negotiated and adopted after the date of transfer are not enforceable against the new employer where the latter does not have the possibility of participating in the negotiation process.
In addition, the Regulations introduce a limit of one year during which collective agreements negotiated pre-transfer continue to bind transferees. After that time, terms of employment will be able to be renegotiated provided the new terms are no less favourable overall to employees than those which applied immediately before the variation.
The Regulations have also extended the minimum time period for complying with the rules regarding the provision of employee liability information from 14 to 28 days prior to the date of transfer and businesses with fewer than ten employees are allowed to inform and consult directly employees affected by the transfer when there is neither a recognised independent trade union in place nor any existing appropriate representatives. The latter exception applies in respect of transfers which took place on or after 31 July 2014.
The Department for Business, Innovation and Skills has published a guide to the TUPE Regulations as amended.