UK: Government confirms TUPE reforms will not repeal service provision change clauses

The Government has just published its response to the consultation on proposed reforms to TUPE.  The original plans were to bring the reforms into force in October 2013, but as anticipated the timetable has slipped and the Government now intends to lay new regulations before Parliament in December 2013 and bring them into force in January 2014.  The response is available here.

Key changes to the original proposals include:

• the service provision change clauses will not be removed from TUPE; 
• a transferor will not be allowed to rely on a transferee's economic, technical or organisational (ETO) reason as a defence to a claim of unfair dismissal for a TUPE-connected reason; 
• the requirement on a transferor to provide employee liability information prior to the transfer will not be repealed, though the timing will be changed so that the information must be given 28 days before the transfer (rather than the current 14 days).

Key proposals that are going ahead include: 

• transferees will be permitted to negotiate (transfer-related) changes to contractual terms derived from a collective agreement after one year post-transfer, provided the overall terms are no less favourable to the employee;  the Government will also amend TUPE to provide expressly for a static approach to the transfer of terms derived from collective agreements (so transferees will not be bound by post-transfer collective bargaining between transferor and union);
• change of location redundancies are to qualify as ETO dismissals and therefore not automatically unfair (the current caselaw test requires a change in the numbers or functions of the workforce, which exclude such redundancies);
• the drafting of restrictions on changing terms and conditions and dismissals are to be narrowed to mirror EU law;
• collective redundancy consultation by a transferee with the representatives of the transferring employees started prior to the transfer will count for the purposes of the transferee’s collective redundancy consultation duties, provided that the transferor and transferee can agree and the transferee has carried out meaningful consultation; 
• micro-businesses (with 10 or fewer employees) will not have to elect employee representatives and, if there are none already in place, can instead inform and consult with the individual affected employees.

The Government also intends to engage with European partners to demonstrate the benefits of permitting greater harmonisation of terms than is currently allowed under EU law.