TUPE reform — what lies ahead?

The government’s response to its consultation on TUPE was issued in early September and paves the way for changes to TUPE expected to be introduced in January 2014. In this business insight, Walker Morris examines the proposed changes, their practical implications and what businesses should be aware of at this stage.

The SPC rule (which very broadly means that the majority of outsourcing situations are covered by TUPE) will not be repealed. This is much to the relief of many businesses engaged in outsourcing, including the 67 per cent of consultation respondents who were against its repeal primarily because of the legal uncertainty it would cause. The government’s view is that it ‘gold-plates’ TUPE in that it goes over and above the requirements of the Acquired Rights Directive but is, nevertheless, necessary and not burdensome for business. 

The government will, however, make an amendment to TUPE to confirm that, for there to be a service provision change, the activities carried on post-transfer must be ‘fundamentally or essentially the same’ as those carried on before it. This can be viewed as a house-keeping point, which confirms the approach already set down and followed in case law…

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