In a move that has surprised many, the UK Government has proposed repealing the amendments made to the TUPE Regulations in 2006 which sought to ensure that most service provision changes were brought within the scope of the Regulations.
Given that what both employers and employees so desperately want in a SPC situation is greater certainty about who and what transfers and when, the Government’s position seems to be a step backwards rather than forwards. Whilst many readily admit that there are still a number of challenges with the 2006 Regulations, it is clear that service provision changes will in most cases amount to a TUPE transfer. It is difficult to see how reverting to the old TUPE regime (and with it the difficult task of deciding whether a service provision change nevertheless amounts to a TUPE transfer under the “traditional” definition of a transfer) actually helps.
A further concern is the proposal to repeal the requirement to provide “employee liability information”. The concern raised by many during the previous Call for Evidence process was that the 14 day timeframe within which this information must be provided was too short and did not give businesses sufficient time in advance of the transfer to properly assess their prospective liability or to manage information and consultation requirements adequately. However, rather than extend the time limit, the Government is proposing to leave the issue of what information should be shared and when to the parties to the transfer. Both proposals are made under the banner of cutting red tape to help employers, but in reality the Government has merely confused red tape with clarity – it is easy to conclude that what stifles growth and business activity is not clear regulation, but the uncertainty arising from regulation which is either unclear (the pre-2006 position) or absent altogether.
Other aspects of the Government’s proposals are more welcome. In particular, the Government has suggested re-aligning the TUPE Regulations with the Acquired Rights Directive to give transferees greater flexibility to allow “transfer-connected” changes to terms and conditions of employment. Similarly, it is proposed to change the provisions which currently allow employees to resign and claim unfair dismissal in response to detrimental changes in their working conditions, even where those changes would not be a breach of contract. Those proposals would address the concern that currently employees benefit from protection against changes made in a TUPE context notwithstanding that, in any other context, that treatment might be permissible.
Similarly, the Government has agreed to look at what constitutes “an economic, technical or organisational reason” enabling workplace changes to be made following a TUPE transfer to ensure that employers can actually benefit from the flexibility this provision was intended to provide. In particular, the indications are that it will be made clear that a change of workplace can constitute an ETO, which will be particularly helpful to employers (and employees) in case of off-shoring or other relocation.
These and the rest of the Government’s proposals are subject to a consultation process which ends on 11 April 2013.
Want to have your say? We intend to produce a formal response to the Government’s consultation paper and welcome your views. To arrange a call or meeting to discuss the proposals further, please contact Clare McNicholas (email@example.com).