Before and now: TUPE changes

There are several TUPE changes that came into force on 31 January 2014 by virtue of The Collective Redundancies and Transfer of Undertakings (Protection of Employment) Amendment Regulations 2014(SI 2014/16). The key changes are as follows: 1. More flexibility with lawful harmonisation of terms post-transfer Before 31 January 2014: The previous position was that any changes to an employee’s terms were void if:

1. the sole or principal reason for the change is the transfer itself; or
2. the sole or principal reason for the change is a reason connected with the transfer which is not an ETO (economic, technical or organisational) reason.

This meant that the only situations in which changes to an employee’s terms were permitted were if:

• the sole or principal reason for the variation is a reason which is unconnected with the transfer; or

• the sole or principal reason for the variation is a reason connected with the transfer which is an ETO reason entailing changes in the workforce.

Now: The above-numbered situation 1 still applies. Therefore, any changes to an employee’s terms will still be void if the sole or principal reason for the change is the transfer itself. However, the above-numbered situation 2 has been removed and the following variations of contract will be permitted:

1. if the sole or principal reason for the variation is an ETO reason entailing changes in the workforce, provided that the employer and employee agree to that variation; or
2. if the terms of the contract permit the employer to make such a variation.

A common change in transfer situations is a change to the workplace location and the amendments to TUPE now specifically state that such moves may now be considered as a change in the workforce. The Amendment Regulations further state that the restriction on varying contracts will not apply to terms which are incorporated from a collective agreement provided that:

• the variation takes effect more than one year after the date of the transfer; and

• following the variation, the rights and obligations in the employee’s contract, “when considered together” are no less favourable to the employee than those which applied immediately before the variation.

These new provisions apply where:

• the TUPE transfer takes place on or after 31 January 2014;and

• the purported variation is agreed on or after 31 January 2014 or, in a case where the variation is not agreed, it starts to have effect on or after that date.

2. Automatically unfair dismissals Before 31 January 2014: Employees were treated as unfairly dismissed if the sole or principal reason for the dismissal was:

1. the transfer itself; or
2. a reason connected with the transfer that is not an ETO reason entailing changes in the workforce.

Now: Limb 1 above remains. Therefore, if the sole or principal reason for the dismissal was the transfer, the dismissal will still be automatically unfair. Limb 2 above has been removed. The new rules state that if the sole or principal reason for the dismissal is an ETO reason entailing changes in the workforce of either the old employer or new employer then the dismissal will potentially be unfair on grounds of redundancy or some other substantial reason. However, this does not explicitly cover the situation where a dismissal is not by reason of the transfer or for an ETO reason. Would the dismissal be automatically or potentially unfair? Therefore, there is likely to be a period of uncertainty; there is likely to be guidance produced to deal with this issue. 3. Employee liability information to be provided by the new employer 28 days before the transfer Before 31 January 2014: New employers had to provide the employee liability information 14 days before the transfer. Now: New employers have to provide employee liability information 28 days before the transfer. 4. Employers with fewer than 10 employees may directly consult affected employees Before 31 July 2014: Employers who are micro-businesses i.e. those with fewer than 10 employees still have to comply with the obligations to inform and consult under TUPE even though they would often prefer to talk to the individuals themselves rather than go through representatives. On or after 31 July 2014: Employers who are micro-businesses may directly consult affected employees in cases where there are no existing appropriate representatives and the employer has not invited any affected employees to elect employee representatives. Note the different date on which this provision comes into force.