The Government publishes its response to consultation on TUPE

For employment specialist Paul Statham, the real interest of this lengthy document centres around what the Government does NOT intend to do, and the problems that might create with our European partners… 

The Government has today published its response to a consultation on reform of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The headlines are as follows:-

• The Government will amend the TUPE regulations to allow re-negotiation of collectively bargained terms one year after the transfer, even though the reason for the change is because of the transfer as long as ‘overall the change is no less favourable to the employee’
• The Government will amend TUPE to confirm the recent decision in the European Court of Alemo-Herron concerning the static approach to the transfer of terms derived from collective agreement
• The Government will amend TUPE to confirm that a change in the location of a workforce following a transfer can be an Economic, Technical or Organisational (ETO) change, so that any genuine redundancies will not be deemed automatically unfair dismissals
• The Government will amend Regulation 4 so that the wording closely reflects the wording of the directive. It will also provide that unilateral changes pursuant to a contractual provision will be allowed if such changes could otherwise have been made, and there will continue to be an ETO provision to allow changes
• Regulation 7 will be amended so that the wording closely reflects the wording of the directive. It is anticipated that the new provision will refer to ‘the transfer itself’ being the reason for dismissal, thereby deleting the current alternative of ‘a reason connected with the transfer…’.
• The Government will retain the service provision change, but it will be amended to make it clear that activities carried on after the change in the service provision must be ‘fundamentally or essentially the same’ as those carried on before
• The Government will amend the collective redundancy provisions of the Trade Union and Labour Relations (Consolidation) Act 1992 to make it clear that consultation which begins pre-transfer can count for the purposes of complying with the collective redundancy provisions, provided the transferor and the transferee agree, and the consultation is meaningful
• The Government will allow microbusinesses to inform and consult directly with affected employees where there is no recognised independent union and no existing appropriate representatives. Microbusinesses are defined as those with 10 or fewer employees
• The Government intends to retain the rules about employee liability information, but the time for providing the information will be extended from the current 14 days before the transfer to 28 days
• The Government intends to ‘work to improve TUPE guidance’.

The big news in this 62-page document is what the Government is not doing… 

It is not going to repeal the so-called ‘gold-plating’ contained in the service provision change. Now, instead of being gold-plating, it is ‘an example of where good regulation that is additional to that required by European directive can deliver benefits for both business and individuals’ (paragraph 4.11).

Further, the Government has seen sense and will not allow a transferor to rely on a transferee’s ETO reason to dismiss an employee prior to transfer.

Finally, the Government is not going to amend Regulation 4(9), the provision relating to an employee treating a contract of employment as having been terminated where it would involve a substantial change in working conditions to their material detriment.

Intriguingly the response to the consultation also suggests that the Government will seek an amendment to the directive by engaging with its European partners ‘to demonstrate the potential benefits of a harmonisation framework for individuals and the economy’.

I anticipate that that will be a hard sell to many other European countries.