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TUPE reform

TUPE is changing with effect from 31 January 2014. The key changes are:

 Service Provision Changes

  • For TUPE to apply to a service provision change, the activities carried on after the change must be “fundamentally the same” as those carried on before it. This confirms the current position under case law.

Providing Employee Information

  • The transferor will be required to provide employee liability information to the transferee 28 days (rather than 14 days) before the transfer. There is a three month lead in period for this change, applicable only to transfers on or after 1 May 2014.

Collective Agreements

  • Collective agreement terms can be renegotiated one year after the transfer (even where the reason for the change is the transfer), but only if overall the change is no less favourable to the employee.
  • Tribunals will adopt a “static approach” to terms derived from collective agreements, where the transferee is not a party to the collective agreement or bargaining process. This means that only those terms in collective agreements in existence at the date of the transfer will be binding on the transferee – not subsequent changes negotiated by the original parties to the collective agreement.

Workforce Changes

  • Changes in the location of the workforce following a transfer can now fall within the scope of the “economic, technical or organisational reasons entailing changes in the workforce” (ETO) defence. As a result, redundancies due to a change in location following a TUPE transfer will not be automatically unfair.

Pre-transfer consultation

  • Pre-transfer consultation by the transferee can count for the purposes of complying with the collective redundancy rules, provided that the transferee notifies the transferor in writing and the transferor agrees.

Consultation in micro businesses

  • Micro businesses (those with 10 or fewer employees) will be allowed to inform and consult directly with affected employees where there is no recognised trade union, nor existing appropriate representatives.  The change will only apply to transfers taking place on or after 31 July 2014.

Further details of the changes are available in today’s e-bulletin. If you do not already receive our e-bulletins and would like to, please sign up here.

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