Hogan Lovells comments on TUPE reforms

Elizabeth Slattery, partner in Hogan Lovells’ employment team, has commented on the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) reforms, which came into effect on 31 January 2014.

Although the changes being introduced are not as radical as originally proposed — the government ultimately decided not to scrap the service provision rules (SPC) that mean that TUPE applies to many outsourcing situations — they try to give a bit more flexibility around how TUPE works in practice. For example, the government aims to make it easier for employers to change terms and conditions of employment in the context of a TUPE transfer — something that is often difficult.

Slattery said: ‘Many businesses involved in outsourcings will welcome the fact that the SPC rules are here to stay — they give much greater certainty about what should happen to employees in an outsourcing situation than would otherwise be the case.

‘It is also clear that in future it should be easier to change an employee’s workplace in connection with a transfer and that it will be possible to consult about possible redundancies at an earlier stage than is currently allowed.

‘Some of the other changes to TUPE are well intentioned but may not make much difference in practice. The difficulties surrounding changing terms and conditions following a TUPE transfer largely stem from limitations imposed by a number of European Court of Justice decisions rather than the way TUPE is actually drafted.’

The changes introduced by the amendments include:

  • Increasing the time for providing employee liability information to the transferee from 14 to 28 days before the transfer (from 1 May 2014)
  • Making a change of workforce location in the context of a transfer a potentially fair reason for dismissal — not automatically unfair as is currently the case
  • Providing that dismissals will only be automatically unfair if the reason for them is the transfer — not reasons ‘connected with’ the transfer as the existing regulations specify
  • Allowing a transferee to conduct collective redundancy consultation with transferring staff before a transfer takes place, provided that this is agreed with the transferor and the consultation is ‘meaningful’
  • Specifying that terms derived from collective agreements will be able to be renegotiated one year after transfer, even if the reason for the change is the transfer, provided that overall the changes are no less favourable to employees
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