UK: amendments to TUPE finalised and in force 31 January 2014

Parliament has now approved the final regulations amending TUPE and collective redundancy law, with effect (in most part) from 31 January 2014;  a copy is available here.  The Government has also issued amended guidance on TUPE to reflect the changes.  The key points for employers are as follows.

• Employee liability information (ELI) about the transferring employees must be provided by the transferor to the transferee at least 28 days prior to the transfer (increased from 14 days);  this will apply to transfers taking place on or after 1 May 2014.
• Transferees can 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. Note that this relates only to those terms derived from the collective agreement and not other terms of employment, and there could be legal and industrial relations issues where the union is still recognised by the employer for collective bargaining purposes.  (The guidance does not shed any light on how or when the Government envisages employers might use this option.)
• Where employment terms are derived from collective agreements, transferees will not be bound by post-transfer collective bargaining between transferor and union.
• Change of location redundancies qualify as ETO dismissals and therefore are no longer automatically unfair.  Transferees will still need to follow a fair process.
• 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 transferee makes such an election on or after 31 January 2014 and the transferor agrees to it.  Transferees wishing to take advantage of this option should seek to negotiate appropriate contractual provisions with the transferor.
• Micro-businesses (with fewer than 10 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.  This will apply to transfers taking place on or after 31 July 2014.  The guidance suggests that the size of employer should be determined at the time when it is required to give the information about the transfer;  this point is not addressed by the regulations themselves.

The final regulations are largely the same as the draft published on 31 October 2013.   The main change is that a transferee cannot keep changing its mind whether to carry out pre-transfer collective redundancy consultation - it can elect to do so once, and cancel this election, but must then wait until after the transfer.  The draft regulations envisaged an ability to make further elections having cancelled earlier ones.