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BIS publish response to consultation on TUPE reform

As we reported in last week’s News Update, a BIS spokesperson had indicated that the response to consultation on TUPE 2006 reform would be published shortly, with the changes planned to come into force in January 2014. The response to consultation has now been published. The changes are set out below. The Government intends to lay the new Regulations before Parliament in December 2013 – but note that the document makes no mention of an implementation date. It was strongly suggested by the BIS that two, ‘viewed as’, gold-plating measures would be abolished: (i) removing 'service provision change' rules (contracting out and back in) which set out what amounts to a TUPE transfer; and (ii) removing the transferor's obligation to provide employee liability information. However, these provisions will remain unchanged, but will have slight amendments as indicated in (5) and (8) below, respectively. A summary of the changes is as follows:

1. Allow renegotiation of terms derived from collective agreements one year after the transfer, even though the reason for seeking to change them is the transfer, provided that overall the change is no less favourable to the employee.

2. Provide expressly for a static approach to the transfer of terms derived from collective agreements.

3. Changes in the location of the workforce following a transfer can be within the scope of economic, technical or organisational reasons entailing changes in the workforce, thereby preventing genuine place of work redundancies from being automatically unfair.

4. Amend Regulation 4 (restriction on changes to terms and conditions) and Regulation 7 (protection against dismissal because of a transfer) to bring them closer to the language of the Acquired Rights Directive. With Reg 4, the provision will also set out 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.

5. An amendment to the service provision change rules to reflect the approach set out in the case law, namely that for there to be a TUPE service provision change, the activities carried on after the change in service provision must be “fundamentally or essentially the same” as those carried on before it.

6. Amend the Trade Union and Labour Relations (Consolidation) Act 1992 to make it clear in statute that consultation which begins pre-transfer can count for the purposes of complying with the collective redundancy rules, provided that the transferor and transferee can agree and where the transferee has carried out meaningful consultation.

7. Improve the TUPE process for micro businesses by allowing such businesses to inform and consult directly affected employees when there is no recognised independent union, nor any existing appropriate representatives.

8. Retain the rules about employee liability information, but extend the time before the transfer when it must be given to the transferee to 28 days.

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