The Government has now published a long-awaited consultation paper on its proposals to amend the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). In summary, these include:
- Removing the TUPE regulations which currently apply to service provision changes (SPCs). This means that SPCs would essentially be subject to the same test as other business transfers when deciding whether TUPE applies ie whether there is a transfer of an economic entity which retains its identity.
- Removing the obligation to provide employee liability information, and only to do so 14 days before the transfer whilst making it clear that information should be disclosed where it is necessary for either party to comply with their information and consultation obligations.
- Extending the meaning of ‘economic, technical and organisational reasons entailing changes in the workforce’ (ETO reasons) to include changes in the location of the workforce. This means that dismissals may not be automatically unfair if there is a change in place of work because of the transfer.
- Allowing the transferee to consult with transferring employees about collective redundancies prior to the transfer. This would count for the purposes of the separate requirement to consult on collective redundancies.
- Allowing micro-businesses to inform and consult their employees directly if there are no recognised trade union representatives or existing representatives.
- Improved guidance on certain issues including the application of TUPE to temporary agency workers, and the process for electing employee representatives.
The Government is also seeking views on whether transferees should be able to change terms and conditions derived from collective agreements after a period of one year following the transfer, and whether transferors should be able to rely on the transferee’s ETO reasons in respect of pretransfer dismissals.
Responses to this consultation must be submitted by 11 April 2013. Changes are planned to come into force in October 2013, with the exception of the service provision changes which may come in at a later date. In the meantime, any service contracts currently being negotiated should contain detailed provisions to deal with the possibility that TUPE will not apply at the end of the contract.