The Government has published its response to the consultation on the reform of TUPE.

The most notable news is that the Government has decided not to remove the service provision change rules. It has apparently been persuaded that to do so would create greater uncertainty for businesses. However, it is going to amend the legislation in line with case law to clarify that, for there to be a service provision change, the activities carried on after the change must be fundamentally or essentially the same as those carried on prior to the change.

The main changes to the regulations that are to be made will:

  • allow terms derived from collective agreements to be renegotiated one year after the transfer, even where the reason for seeking to change them is the transfer. However, this is subject to the proviso that the overall changes must be no less favourable to the employees
  • provide that the static approach should be adopted with regard to collective agreements that transfer. This means the transferee employer will only be bound by the terms of collective agreements in force on the date of the transfer (and not any changes agreed afterwards under collective arrangements to which the transferee employer is not a party)
  • provide that relocation will be within the scope of an “economic, technical or organisational reason entailing changes in the workforce” (an “ETO reason”) so that genuine place of work redundancies will not be automatically unfair
  • amend the provisions that restrict changes to terms and conditions and protect against dismissal so that they more closely reflect the wording of the Acquired Rights Directive and ECJ case law - this may give employers more flexibility in certain circumstances
  • clarify that pre-transfer TUPE consultation will count for the purposes of complying with collective redundancy consultation obligations (in certain circumstances)

The Government has also decided not to repeal the requirement to provide employee liability information. Instead, the Government is going to increase the time before the transfer by which employee liability information must be provided from 14 days to 28 days.

It is anticipated that these changes will come into force in January 2014, although this has not been confirmed.

The Government intends to lay the new regulations before Parliament in December 2013 and there will be a ‘lead–in’ period for employers to plan future transfers in line with the new rules. We will provide further update when the draft regulations are published and the implementation date is confirmed.