UK: TUPE reform - draft regulations published

On 31 October the Government published draft regulations to amend TUPE, available here. These are not yet finalised or agreed with Ministers. The Government intends to lay the regulations before Parliament in December 2013 and bring them into force in January 2014.

The draft regulations make amendments to TUPE and the collective redundancy rules to implement the proposed changes set out in the BIS response to consultation, summarised here.

Perhaps of most interest is the drafting permitting transferees to start collective redundancy consultation pre-transfer. The draft regulations provide that a transferee can elect to consult (or start consulting with) representatives of transferring employees pre-transfer in relation to proposed redundancies, provided that it notifies the transferor in writing and the transferor agrees. The transferor can provide information or other assistance to the transferee to help the transferee meet its consultation obligations.

The transferee can change its mind – an election to consult pre-transfer can be cancelled by written notice to the transferor, in which case any consultation carried out is nullified and the employee representatives and Secretary of State must also be notified of the cancellation. A fresh election to consult can be made (and cancelled) subsequently.

The transferor's co-operation will be critical, as its failure to provide information or assistance will not amount to a special circumstances defence to failure to consult properly.

In terms of timing for the reforms, the draft regulations envisage implementation from the commencement date, save in two cases:

1. the amendment requiring employee liability information to be provided by the transferor to the transferee 28 days, rather than 14 days, before the transfer is to come into force 3 months after the commencement date
2. the permission for micro employers to consult with individual employees rather than electing representatives is to come into force 6 months after the commencement date.

It is also worth noting that redundancies due to a change of workplace location on the transfer, while no longer to be automatically unfair, will still be at risk of an ordinary unfair dismissal claim if the process adopted is unfair (and employees have the qualifying service). Although collective redundancy consultation can be completed pre-transfer, there is nothing in the draft regulations validating an individual consultation process pre-transfer for the purposes of an unfair dismissal claim.