Just in time for our first post-Summer newsletter, the Government has published details of its proposed changes to TUPE. The new regulations themselves are not yet available and no start date has been announced, although the aim is for Parliament to consider them in December. Now that the service provision rules (SPC) are staying there will be no significant lead-in period for the changes.
The main headline is the decision not to scrap the SPC rules. The Government has accepted evidence that their removal would cause uncertainty, hinder commercial contracts and increase costs. But the rules will be amended to say that for there to be an SPC, the activities carried on after must be "fundamentally or essentially the same" (or words to that effect) as before the transfer. This reflects the position under existing case law and is designed to make it clear that if services are provided in a novel or innovative way post-transfer, the SPC rules might not apply.
Other things the Government has decided not to do include:
- allowing a transfer or to rely on the transferee's "economic, technical or organisational reason entailing changes in the workforce" (ETO reason) in respect of pre-transfer dismissals
- removing the transferor's obligation to provide employee liability information; although the time for providing the information will be increased from 14 to 28 days
- narrowing the scope of the current right to resign in response to a substantial change in working conditions to the material detriment of the employee.
However, some proposals are to go ahead:
- a change of workforce location can potentially be within the scope of an ETO reason, so that dismissals for refusing to accept such a change following a transfer would not be automatically unfair
- a limited change to the rules on amending contracts of employment after transfer. The current situation is that changes "connected with" a transfer may be void, as well as those made because of the transfer itself. The new test will refer to the "transfer itself" being the "reason" for the offending variation. It is unlikely that this will make any great difference in practice - changes purely for the purposes of harmonisation of terms and conditions are clearly still prohibited
- allowing a transferee to conduct collective redundancy consultation with transferring staff before a transfer takes place, provided that this is agreed with the transferor and the consultation is "meaningful"
- terms derived from collective agreements will be allowed to be renegotiated one year after transfer, even though the reason for the change is the transfer, provided that overall the changes are no less favourable to employees. The law on the effect of transfers on collectively agreed terms will also be changed to reflect the "static" approach recently endorsed by the courts.