The Government has now published its response to the consultation on the suggested changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”). The proposed change that would have had the biggest impact – the removal of the concept of service provision changes – will not be implemented.
Colleges will broadly welcome the Government’s move given that the proposals are not as far reaching as previously thought. TUPE applies across a whole range of issues in FE, from College mergers to outsourcing certain functions. TUPE is one of the most complex areas of employment law there is so any changes to TUPE ought ideally to simplify rather than complicate the legislation. The current proposals appear to do this.
The Government had suggested repealing the provisions in TUPE relating to service provision changes as it felt the provisions created uncertainty and were unnecessary. This is at odds with the majority of respondents to the consultation who were of the opinion there had been an increase in the certainty in the application of TUPE to outsourcing and changes of service provider as a result of the 2006 changes.
Whilst the original proposed changes will not be brought in there will be some amendments to the TUPE provisions to reflect the decision of Metropolitan Resources Ltd v Churchill Dulwich (UKEAT/0286/08). In this case the Employment Appeals Tribunal decided that for a change in service provider to be a relevant transfer under TUPE the duties carried out post transfer must be ”fundamentally or essentially the same” as the duties carrier out pre-transfer.
The decision not to remove the concept of the service provision change in its entirety will be good news to the majority but there may still be uncertainty about the application of this provision in some circumstances such as where more than one service provider carries out activities.
Some of the other changes the government proposes to bring in include:
· Amending TUPE provisions which relate to protection against dismissal so that protection is only available where the dismissal is as a result of the TUPE transfer. It is likely the concept of dismissal for a reason “connected with” the transfer will be removed. The idea behind this change is to bring TUPE in line with what the European legislation from which TUPE was spawned intended.
· Varying terms and conditions will only be prevented where the reason for the variation is the transfer itself. A further change will allow the new employee/incoming service provider to make variations that are permitted under a contractual provision.
· The time frame for the transferor employer to provide employee liability information before a TUPE transfer is to be increased from 14 to 28 days. The government decided not to repeal the obligation to provide this information, considering the points expressed by respondents when making their decision. The respondents may be against repeal of this obligation as when the transferor and the transferee are competing service providers there may be concern that if the obligation was repealed the incoming service provider could be in a position whereby they have no information on employees that have transferred over. In practice, most Colleges obtain this information well in advance of the statutory timeframe but having the time limit embedded in the legislation can only be a good thing.
· Where there is a change in the employee’s place of work following a TUPE transfer, the change will fall within the remit of “economic, technical or organisational reasons entailing changes in the workforce.”
· Terms arising out of collective agreements to be renegotiated one year after a TUPE transfer but only where the changes are no less favourable to the employee.
· Amendments will be made to TUPE which mean that transferee employers will only be bound by collectively agreed terms that are in place on the date of the transfer.
· Employers with ten employees or less will be able to inform and consult directly with affected employees rather than electing employee representatives where there is no recognised independent union or existing appropriate representatives.
The Government indicated in its response that the drafting of the legislation is not yet finalised. The government has not announced when they expect the changes will come into force, but they have said they are planning to put forward the draft regulations to Parliament in December of this year.
Matt Kelly is a partner at Thomas Eggar, the law firm