On 5 September 2013, the Government published its response to its consultation on proposed changes to TUPE and has now published the draft Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2013, due to come into force in January 2014.
The Government originally proposed to repeal the service provision change (SPC) rules, which apply TUPE to almost all outsourcing scenarios. The big surprise in September was that the Government listened to the responses to its consultation and dropped the proposed repeal. The only change here is that an SPC will only take place where the post-transfer activities are "fundamentally the same as the activities carried out previously". This was already more or less the position under case law, so the new regulations are unlikely to make any real difference in this regard.
The most interesting amendment for retailers is to the collective redundancy consultation rules in a TUPE situation. In the recent Woolworths case, it was held that the fact that each individual store was a separate "establishment" for collective redundancy purposes had to be disregarded in calculating the threshold of 20 employees which triggers the requirement to consult collectively. The new regulations will amend the collective consultation rules by making it clear that consultation by a transferee prior to a TUPE transfer can count towards the minimum consultation period. This will be the case so long as the transferor agrees and meaningful consultation is completed by the transferee.
Change of location
At present, any dismissal for a reason connected with a TUPE transfer will be automatically unfair unless there is an economic, technical or organisational (ETO) reason entailing a change in the workforce. Case law currently confines this to changes to either the number of employees or the functions that those employees perform. This means that redundancies due to a change in location cannot be for an ETO reason and are automatically unfair. The new regulations will therefore expressly provide that a change in location will count as an ETO reason so that redundancy dismissals due to changes in location of the workplace will not be automatically unfair. However, the transferee will still have to satisfy the normal rules for dismissals to be fair.
The new regulations also make a number of other changes:
- the renegotiation of contract terms derived from collective agreements will be allowed one year after a transfer, provided the changes are no less favourable to the employee;
- contract terms collectively agreed after a transfer date will not automatically transfer (the socalled "static approach");
- employee liability information must be provided 28 days before a transfer rather than 14; and
- micro businesses (10 or fewer employees) will be able to inform and consult directly