Transfer of Undertakings Regulations (TUPE)

Jo Swinson Excerpts

Thursday 5th September 2013 Written Statements

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

Earlier this year I published a consultation seeking views on how we should reform the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE regulations). This consultation was part of the Government’s Parliament-long employment law review. The review is reforming employment laws so that they support the flexibility and effectiveness of our labour market; and ensuring that our employment laws firmly establish fairness for workers and employers.

The TUPE regulations protect employee rights when the business or undertaking for which they work transfers to a new employer. Our consultation presented a number of proposals to improve the regulations by removing unnecessary “gold plating” and bureaucracy whilst retaining important protections to ensure that transfers continue to be fair for employees.

I have published the Government’s response to the consultation today. In our response we outline a package of reforms that remove unfair legal risks that businesses currently face, give businesses more legal certainty in what they can do and reduce the bureaucracy of a transfer.

Our intention is that regulations will be laid before Parliament in December 2013.

The amendments will include changing the wording of the provisions in TUPE in respect of restricting changes to contracts and protection against dismissal so that they more closely reflect the wording of the acquired rights directive and the case law of the Court of Justice of the European Union.

We will allow terms derived from collective agreements to be renegotiated one year after a transfer provided that overall the change is no less favourable to the employee.

We will also amend the Trade Union and Labour Relations (Consolidation) Act 1992 so that, in certain circumstances, consultation which begins prior to a transfer can count for the purposes of complying with the collective redundancy rules. Many businesses already engage in such consultation but businesses that do so run the risk of a legal challenge that it may not count—our amendment seeks to provide certainty to employers on this point.

In addition we will also allow small firms, in some situations, to inform and consult employees about transfers directly. We will improve the guidance on a range of issues.

In light of the responses received during the consultation, the Government have decided to retain the transfer test for service provision changes. We have also decided to retain the requirements on employee liability information that must be given to the new employer, as business generally finds these provisions helpful. We have, however, decided to extend the usual deadline for providing this information from 14 to 28 days before the transfer takes place. We believe that by providing information about transferring employees earlier in the TUPE process, new employers can better prepare for their new staff.

A copy of the response document and impact assessment has been placed in the Libraries of both Houses.