The snappily-titled Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 came into force on Friday 31 January 2014. The changes are intended to improve TUPE's effectiveness and flexibility and to ensure that TUPE goes no further than the original EC Directive. However, the changes that have actually been made are much less far-reaching than originally envisaged and several key proposals have been dropped.
The key changes are:
- A service provision change ("SPC") will continue to be regulated by TUPE - it had been suggested that SPCs would no longer be within scope - but the legislation will clarify that the activities carried on after the SPC must be "fundamentally the same" as before the transfer.
- The requirement for a transferor to provide employee liability information will be retained, but from 1 May 2014 the information will have to be given 28 days before the transfer, rather than 14 days.
- Changes in the location of the workforce following a transfer will be expressly included within the scope of an economic, technical or organisation reason entailing changes in the workforce ("ETO reason"). This means that genuine place of work redundancies where activities are carried out from a new location will not be automatically unfair.
- Employees' protection from dismissal has been watered down slightly, although if the reason for dismissal is the transfer itself, the dismissal will still be automatically unfair. If the reason for the dismissal is not the transfer itself but simply connected with the transfer, the dismissal will no longer be automatically unfair and the usual unfair dismissal test will apply.
- The restriction on changes to terms and conditions of employment has been varied in the following ways:
- Any contractual terms derived from collective agreements will still transfer to the transferee, but any future changes that may be negotiated to those collective agreements will not be applicable to any employees who have transferred to a different employer. Furthermore, transferees will be able to change contractual terms derived from collective agreements one year after the transfer, provided that the overall change is no less favourable to the employee and subject to the general law on changing terms and conditions.
- The transferor and employee can now agree to make changes to the contract if they would have been able to agree such a change if there had been no transfer, for example, if there is a contractual right to vary the contract. It is envisaged that this will give transferor employers much greater flexibility in changing terms and conditions, which was not previously permitted at all without an ETO reason.
- Collective consultation by the transferee before the transfer can count for the purposes of statutory requirements where 20 or more redundancies are contemplated, provided that the transferor and transferee agree and provided the transferee has carried out meaningful consultation. This will give some reassurance to employers who wish to effect redundancies in as short a timescale as possible.
- From 31 July 2014, micro-businesses (i.e. businesses with fewer than 10 employees) will be allowed to inform and consult affected employees directly when there is no recognised independent union, nor any existing appropriate representatives. Unless otherwise stated, all the above changes are now in force.