TUPE - the Government's response to consultation
Anyone who gets involved with TUPE situations can understand that it can be a minefield of employees’ expectations and fears, due diligence and uncooperative transferors or transferees! Not to mention the various consultation hoops that we all have to leap through to ensure that we are compliant and minimise the risks of litigation.
Having said that, in early September the Government published its response to the ongoing TUPE consultation process.
There are a number of amendments which are being suggested to the Regulations, some of which will make it easier for businesses that are winning business but are put off by the TUPE process that we all have to follow.
A key change being proposed is that terms can be renegotiated from collective agreements one year after the transfer takes place. This is as long as the terms provided are no less favourable to employees. This allows the transferee some level of flexibility as, before, to change any terms was in direct breach of the Regulations.
Within the ETO (Economic, Technical and Organisational) reasons there have often been challenges in Tribunal as to whether a change of location for the workforce is a fair or unfair reason for dismissal. The proposed changes are looking to add clarity and incorporate location as being a fair reason for dismissal within TUPE transfers. This will make it easier for the transferee who needs to consider location with any new contract that they win.
There has always been some argument as to whether TUPE should apply where the transferee is keen not to take on board the transferor’s existing workforce. The proposed changes add some clarity here, looking at service provisions and whether they are ‘fundamentally or essentially the same’ as before the transfer took place. Not rocket science at all, but does bolster any argument for the transferor, who cannot retain the employees once the contract is lost.
What the Government proposals are clear on is that it is NOT removing the ‘service provision change’ on what amounts to a TUPE transfer, so we are sticking with the old system as before.
The Government has provided these proposed changes to allow a more seamless arrangement between the transferor and transferee once a TUPE situation has been established. Only time will tell if they ease the process or overly complicate things.
The consultation will move to draft regulations with a view to having an implementation date in early January 2014. As someone who loves and lives TUPE, I can’t wait!