Government to retain service provision change

By Anthony Korn

The government has decided not to repeal the TUPE rules on service provision change (SPC). Anthony Korn summarises the government’s response to the consultation document published earlier this year.

The government has decided not to repeal Regulation 3(1)(b) of the Transfer of Undertakings Regulations 2006 dealing with changes in service provider. However, the government is to amend the regulations to reflect case law developments that the SPC rules will only apply where the service remains ‘fundamentally or essentially the same’ as that carried out by the previous contractor.

The government’s ‘about turn’ comes as a surprise as the consultation document published earlier this year suggested that it was committed to repeal the SPC rules on the grounds that the rules were ‘anti-competitive’ and amounted to unnecessary ‘gold plating’ of the EU Directive. However, the government appears to have been persuaded that a return to the pre-2006 would have created considerable uncertainty as to when TUPE applied and has accepted that in this instance a certain amount of gold plating is justified…

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