The government has announced changes to TUPE regulations which are designed to cut red tape and make the process simpler and less confusing.
TUPE – the Transfer of Undertakings (Protection of Employment) Regulations – protects the rights of employees when a business is transferred from one owner to another.
The proposed changes mean that one year after the transfer, businesses will be able to renegotiate terms and conditions in collective agreements as long as the overall changes are no less favourable.
The new regulations will also make it clear that where employees have terms and conditions provided by collective agreements, only those terms and conditions existing at the time of the transfer will apply to the employment with the new company.
Later changes to a collective agreement won’t be binding on the new employer if it is neither a party to that agreement, nor takes part in negotiations.
Employment Relations Minister Jo Swinson said: “TUPE rules are essential to making sure that when a business is transferred from one company to another, it happens in a fair and efficient way. There have been some areas of the law which created uncertainty and confusion for businesses trying to comply with the law.
“By making these changes we will clear out the cobwebs in some of the rules which will give businesses more clarity about conducting transfers. As part of the Red Tape Challenge we are reforming these rules, keeping in place the necessary protections for employees and helping support a stronger economy.”
The government says it won’t repeal the rules relating to changes in service provision. These rules mean that TUPE will usually apply to the change in the provision of a service, such as security guarding services for a business, where there is a group dedicated to the service for the client.
The rules protect service sector workers, as they are more likely to move with the work during a change. Employees will continue to be protected as they have been.
TUPE regulations will also be amended so that where the place of work changes after the transfer, any redundancies due to that change will not be automatically unfair. This means that as a starting point, businesses will not face unfair dismissal claims simply because of a change in location of the workplace.
The changes will also enable micro businesses to inform and consult employees directly when there is no recognised trade union or other existing representatives. At present when a business transfer takes place, under TUPE regulations businesses usually have to inform, and sometimes also consult, employee representatives.
The government intends to put the new regulations before Parliament by the end of the year.
We shall keep clients informed of developments.
Please contact Charles Goodbody in our Warminster office on 01985 214444 or email firstname.lastname@example.org if you would like more information about the issues raised in this article or any aspect of TUPE and employment law.