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Reform of TUPE Update

I blogged on 27 September regarding the Government’s proposals to amend the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”).

Draft regulations (entitled the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2013) have now been published. They will be laid before Parliament in December and are expected to come into force in January 2014.

The draft regulations are to give effect to the changes referred to in my previous blog from the date that the new regulations come into effect, save as set out below.

Employee liability information (“ELI”)

The moving forward of the requirement for a transferor to provide a transferee with ELI to 28 days before the transfer takes place will only apply to transfers which take place on or after the date 3 months after the new regulations come into force.

This will enable transferors to factor in the new time-limit into transactions.

Micro businesses

The draft regulations clarify that the ability to inform and consult affected employees directly where there are no existing representatives will apply to employers with fewer than 10 employees.  However, for reasons which are not clear, this amendment will only apply to transfers which take place on or after six months after the new regulations come into effect.

I also make the following comments on the draft regulations.

Restrictions on changes to terms and working conditions

The Government has previously suggested that the removal of transfer-connected reasons from the restriction on varying employment contracts and from the scope of the protection against dismissal will result in greater flexibility for employers. However, as anticipated, it is questionable whether the wording of the draft regulations achieves this purpose.

Duty to inform and consult over collective redundancies

As I explained in my 27 September blog, it is common for redundancies to take place after a TUPE transfer; and there will be overlapping obligations to inform and consult under TUPE and in respect of the collective redundancies where 20 or more are proposed to take place within a 90 day period.

As anticipated, the law is to be changed to allow a transferee to elect to consult representatives of affected employees, including transferring employees, before the transfer in relation to collective redundancies, provided that it notifies the transferor in writing and the transferor agrees.  The transferor may provide information or other assistance to the transferee in order to assist it to comply with the collective consultation requirements.

The draft regulations also provide that a transferee who elects to carry out pre-transfer consultation may at any time cancel its election – although if it does so, it must inform all affected employees and the Secretary of State.  A transferee may also subsequently make a fresh election to carry out pre-transfer consultation (and cancel that election).

For further information in relation to TUPE, contact me on telephone 01952 211011; email christopher.piggott@lblaw.co.uk or my colleague Will Morse on telephone 01432 377152; email  will.morse@lblaw.co.uk.