The new TUPE regulations taking effect from January this year introduce a number of amendments that could have considerable importance for charitable organisations.
New regulations changing the law on transfers of undertakings took effect in stages from the end of January 2014. As well as more technical drafting changes, there have been a number of amendments that could have considerable importance for charitable organisations. These include the following (all apply to transfers taking effect from 31 January 2014 onwards):
- The regulations have been amended to reflect a “static” approach to collectively agreed terms following a transfer. That will mean that only those terms agreed at the date of the transfer will bind the transferee. Transferred employees will not have the benefit of terms agreed after the transfer as part of the pre-transfer collective bargaining machinery, unless the transferee is able to participate in this.
- In another change that reduces the impact of pre-transfer collective agreements, it will be possible to change terms incorporated from a collective agreement after a year, provided that the employees are offered a replacement package which, taken as a whole, is no less favourable to them.
- The amendments also widen the scope of the defence, which prevents a transfer-related dismissal being automatically unfair when it is for an “economic, technical or organisational reason entailing changes in the workforce” (an ETO reason). Under the old law, a change in the location of the workforce alone can not count as an ETO reason, which means that transferees can be exposed to claims for automatically unfair dismissal where transferred workers cannot relocate. The definition of an ETO reason has now been amended to make it clear that it covers changes in location as well as other workforce changes.
- The rules on collective redundancy consultation have been amended to allow a transferee to start consultation prior to the transfer with the co-operation of the transferor. This often happened informally in any event, but technically does not count towards the minimum consultation period. That’s because, under the old rules, consultation could only be initiated by the current employer. Consultation by a prospective employer didn’t count. However the rule that prevents a transferor from adopting a transferee’s reason for dismissing stays put. So it will still not be possible to dismiss fairly before the transfer in anticipation of post-transfer redundancies.