The response to the Consultation will result in key changes to automatic employee transfer legislation, although the changes do not go as far as originally planned.
On 5 September, the UK government published its response to the Consultation on the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE Regulations). The government launched the Consultation to respond to criticism of the TUPE Regulations for imposing often impractical obligations on employers, as well as for seemingly "gold plating" the minimum European requirements. The government's proposed changes to the TUPE Regulations, which are intended to reduce the burden on employers, will be welcomed by businesses.
In the UK, the TUPE Regulations will apply in certain situations to automatically transfer employees' employment from one employer to another on the same terms and conditions and with continuity of service preserved.
Broadly, the TUPE Regulations will apply in the following two situations:
The TUPE Regulations apply across Europe. If the TUPE Regulations apply to a business transfer or a service provision change, there are a number of consequences, including the following:
The TUPE Regulations are derived from the European Acquired Rights Directive. However, the inclusion of service provision changes in the TUPE Regulations was not required by EU law and was therefore seen as one example of the UK government going further than is required by EU law (so-called "gold plating").
In 2011, the government announced its intention to review the TUPE Regulations to respond to the "gold plating" concerns and claims that the TUPE Regulations are overly bureaucratic. This led to a "Call for Evidence" in 2011 and 2012 and a Consultation in January 2013 on the TUPE Regulations and proposed changes. In its 5 September response to the Consultation, the government outlined the following key changes that will be made to the TUPE Regulations:
The proposed changes to the TUPE Regulations unfortunately do not go as far as the government had originally suggested. For example, the TUPE Regulations' inclusion of service provision changes will not be repealed. The change that will be made to service provision changes (i.e., that the services must be fundamentally or essentially the same) simply follows recent case law developments and therefore may make little difference in practice.
However, it is helpful for employers to have confirmation on this and other points. For example, changing the law to allow pre-transfer consultation to count towards collective redundancy consultation will benefit new employers that know they will need to make redundancies on or shortly after the transfer date. Currently, some new employers have been carrying out pre-transfer redundancy consultations for practical and financial reasons. The change will mean that this practice is supported by legislation.
The government will now produce draft TUPE Regulations to be approved by Parliament. It is likely that the amended TUPE Regulations will come into force in early 2014.
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