On 5 September the government issued its response to consultation over TUPE reform. TUPE has often caused lots of problems for employers and the consultation exercise, with a view to making changes, was meant to iron out some of the difficult issues that arise. However, surprisingly, the changes to the 2006 TUPE regulations are not as significant as previously anticipated. The revised regulations are expected to be laid before parliament in December 2013.
There will be no repeal of service change provisions so that this aspect will be retained. The provisions only apply where the services involved are fundamentally or essentially the same. The wording of the 2006 regulations are to be revised.
There will be a longer time frame for employee liability information to be provided by the transferor (outgoing employer) to the transferee (incoming employer) so that there will be a 28 day timeframe for the process compared to that of 14 days with the existing regulations. The existing defence that 28 days is not reasonable practicable will continue to apply.
Contractual changes following transfer will be permitted after one year. Therefore there will be limited relaxation of post transfer harmonisation which should help the long standing current frustration of employers who are unable to harmonise terms and conditions of transferring and existing members of staff even with agreement. Contractual changes will be permitted as long as the transfer is not the main reason for the change and that the change is based on an ETO reason. There will also need to be an appropriate contractual clause to allow any changes.
Collectively agreed terms will freeze at the point of transfer and clarification on this process will be included in the new regulations.
Change of location will be an ETO reason. This change will allow redundancies to be made due to change of location and will not be automatically unfair as currently.
Pre transfer collective redundancy consultation will count as part of due process. This change will be voluntary and there will be no new obligation to consult pre-transfer. The transferor may permit access to the transferee and consultation must be meaningful. Even if redundancy is inevitable the transferee can not issue any notices of redundancies until after a notional transfer. The transferor can not make any redundancies as it can not demonstrate any ETO reason. Employers will be given guidance on what is a reasonable time to elect employee representatives.
Micro businesses of 10 or fewer employees will be removed from collective consultation therefore employers can inform and consult directly with employees.