20 hr focus TUPE made simple?


On January 31, following consultation from January to April 2013, amendments to the Transfer of Undertakings (Protection of Employment ) Regulations 2006, popularly known as TUPE came into force by way of the snappily named Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 (TUPE 2014), writes Mark Symons, partner, head of employment, Pitmans LLP


TUPE has a significant impact on the sale of the whole or part of a business by way of an asset sale (not a share sale) but it also has had substantial implications for the outsourcing of services, changes of service provider or taking the provision of services back in-house.


Accordingly, TUPE has affected business not only when there is a sale but when, for example, a cleaning contractor is taken on or one cleaning contractor is changed and is replaced with another one.


TUPE is significant because when it applies the following obligations have arisen:


• An Employee Liability Information Schedule providing the details of employee’s terms, disciplinary proceedings and grievance proceedings in the past 2 years has to be provided 14 days before the transfer.


• If the employees are relocated after the transfer and dismissed in connection with the relocation then if the relocation is connected to the transfer then although that is normally a genuine redundancy it is automatically unfair.


• There are restrictions on changes to terms which made it very difficult to change terms following a TUPE transfer.


• There is protection against dismissal because of the transfer or a reason connected to the transfer.


• The provision of prescribed information to a recognised Union or employee representatives of the employees in all cases irrespective of the number of employees affected together with consultation in some cases.


• With the exception of terms in relation to old age within occupational pension schemes employees transfer on the same


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terms and conditions with continuity of employment.


In TUPE 2014, TUPE is affected in the following important ways:


1 Although there had been some suggestion that the provisions in relation to service provision changes will be abolished they will remain but in respect of a TUPE transfer which takes place on or after January 31, 2014 it is clarified that the references “to activities being carried out instead by another person (including the client) are to activities which are fundamentally the same as the activities carried out by the person who has ceased to carry them out”.


2 A variation of a contract of employment that is or will be transferred by a transfer is void if the sole or principle reason for the variation is the transfer but it is now provided that it does not prevent a variation if:


(i) the sole or principle reason for the variation is an economic, technical or organisational reason (ETO) entailing changes in the workforce, provided that the employer and employee agree that variation; or


(ii) the terms of that contract permit the employer to make such a variation then such a variation can be made.


3 The expression “changes in the workforce” has caused a lot of difficulty because of its limited meaning but it is now to include a change to the place where employees are employed by the employer to carry on the business of the employer or to carry out work of a particular kind for the employer. The reference to place has the same meaning as in the definition of redundancy.


4 The provisions in relation to variations apply where the TUPE


transfer takes place on or after January 31, 2014 or the variation is agreed on or after that date or in a case where the variation is not agreed it starts to take effect on or after that date.


5 Where a contract of employment is transferred and incorporates a collective agreement (such as an agreement with a Union) rights, powers and duties and liabilities in relation to a provision of the collective agreement are not transferred if the following conditions are met:


(i) provision of the collective agreement is agreed after the date of the transfer and


(ii) the transferee is not a participant in the collective bargaining for that provision.


6 This amendment applies in relation to a TUPE transfer which takes place on or after January 31, 2014.


7 The provisions in relation to changes in collective agreements after a TUPE transfer caused particular problems where there was a transfer from the public sector and after the transfer there were further enhancements to the redundancy scheme.


8 Again, this change applies in relation to a TUPE transfer which takes place on or after January 31, 2014.


9 An employee is unfairly dismissed if the sole or principle reason for the dismissal is the transfer but that does not apply where the sole or principle reason for the dismissal is an ETO entailing changes in the workforce of either the transferor or the transferee before or after a relevant transfer. Again, the expression “changes in the workforce” is widened, as set out above, and this provision applies to any case where the TUPE transfer takes place on or after January 31, 2014 and a date when any notice of


termination given by an employer or an employee in respect of any dismissal is January 31, 2014 or later or if no notice is given the date on which the termination takes effect is January 31, 2014 or later.


10 In respect of the Employee Liability Information Schedule the time for providing that is lengthened from 14 days to 28 days before the transfer where the TUPE transfer takes place on or after May 1, 2014.


11 In a change that will be very widely welcomed, if an employer employs fewer than 10 employees, there are no appropriate representatives and the employer has not invited any of the affected employees to elect employee representatives then the employer can comply with its information providing obligations as if each of the affected employees were an appropriate representative.


12 In other words the letter containing the prescribed information would go to each of the affected employees and where required consultation would be with each of the affected employees.


13 In respect of this change the amendment applies in relation to a TUPE transfer which takes place on or after July 31, 2014.


Conclusion


TUPE is a major headache for a business looking to sell or to contract out activities or change a contractor so with the expected increase in buying and selling businesses this year any changes which simplify TUPE are very much to be welcomed. With most TUPE transfers the place of work will be changing so the fact that this will be an ETO entailing changes in the workforce is going to be very beneficial. Similarly, not having to elect employee representatives and then consult with the employee representatives will save time and money for micro businesses when providing information and consultation where there are fewer than 10 affected employees.


Details: Mark Symons 0118-9570340 msymons@pitmans.com www.pitmans.com


THE BUSINESS MAGAZINE – THAMES VALLEY – FEBUARY 2014


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