THE NEW TUPE REGULATIONS
ASSOCIATION FOR PUBLIC SERVICE EXCELLENCE
14 MARCH 2014
Presented by: Richard Clegg – DAC Beachcroft LLP
Tel: 0161 934 3074
Email: [email protected]
Changes to the TUPE Regulations
 Changes came in on 31 January 2014
 What are the changes?
 What are the practical impacts of these changes for
councils?
Overview of the changes
 Clarification of what amounts to a service provision
change
 Loosening restrictions on changes to terms and
conditions
 Static rather than dynamic approach to the transfer of
terms of collective agreements
 Relocations and ETO Reasons
 Opportunity to start collective redundancy consultation
pre-transfer
 Employee liability information to be provided 28 days
pre transfer
Service provision changes (1)
 Old position: TUPE applied where an employer
engaged a contractor to do work on its behalf, engaged
a different contractor to do that work in place of the first
contractor, or brought the work “in-house”
 New position: TUPE applies in these circumstances, as
long as the activities being carried out after the transfer
are “fundamentally or essentially the same” as
before the transfer
Service provision changes (2)
 What does this mean for councils?
 Aims to give greater certainty to the application of
TUPE when outsourcing, insourcing, or changing a
service provider
 Greater certainty will reduce management time involved
in negotiating a transaction, and the risk of litigation
arising as a result of the transaction
 But still not entirely certain….
Changing terms and conditions (1)
 Old position: changes void if the sole or principal
reason is:
 the transfer itself
 a reason connected with the transfer which is not
and economic, technical, or organisational (‘ETO’)
reason entailing changes in the workforce
 New position: changes void if the sole or principal
reason is the transfer
Changing terms and conditions (2)
 When can you change terms and conditions?
 If the transfer is not the sole or principal reason for the
change, but the reason is otherwise connected to it.
 If the transfer is the sole or principal reason for the
change but:
 there is an ETO reason and the employer and
employee agree to the change
 the change is permitted by the employment contract
Changing terms and conditions (3)
 When can you change Terms and Conditions?
 If the reason is not the sole or principal reason, but
another reason connected with the change. How useful
will this be?
 If the sole or principal reason is the transfer but:
 there is an ETO and employer and employee agree
 change permitted by the contract e.g. flexibility or
mobility
 collective agreement (see next slide)
 Caution: there is the risk of a material detriment claim
under Regulation 4(9)
Relocation of the workforce (1)
 Old position: relocation of the workforce was not by
itself an ETO reason, meaning that change of location
redundancies where there was no other ETO reason
were automatically unfair under TUPE
 New position: relocation of the workforce is expressly
included as an ETO reason
Relocation of the workforce (2)
 What does this mean for councils?
 Dismissals as a result of a change of location could be
potentially fair on the basis of redundancy
 Where an employee wants to relocate, the contract
could now be varied by agreement in order to provide
for the new location
Collective agreements (1)
 Old position:
 contractual terms derived from collective
agreements are treated in the same way as other
contractual terms when making changes in the
context of a TUPE transfer
 case law has determined that the terms that transfer
are those which exist at the time of the transfer (the
“static” approach), rather than those which occur
post transfer, and the transferee has not negotiated
Collective agreements (2)
 New position:
 contractual terms derived from collective
agreements can be varied after more that a year has
passed since the transfer, provided that overall the
contract is no less favourable to the employee
 static approach derived from case law now codified
Pre-transfer Collective Redundancy
Consultation (1)
 New s.198A into the Trade Union and Labour Relations
(Consolidation) Act 1992 where:
 there is to be, or is likely to be, a relevant transfer
 transferee proposing to dismiss as redundant 20 or
more employees at one establishment within a
period of 90 days or less
 one or more of the transferor’s employees who will,
or is likely to, transfer may be affected by dismissal
or measures in connection with it
Pre-transfer Collective Redundancy
Consultation (2)
 Co-operation: Transferee is reliant on transferor’s cooperation
 Consultation: Risk of not completing consultation prior
to the transfer. Who should the transferee consult with?
 Can notice be given pre-transfer?
 Transferor cannot rely on transferee’s ETO reason
Pooling: Transferee will need to consider whether the
transferring employees will need to pool with existing
employees
Employee liability information
 To be provided at least 28 days before the transfer
(previously 14 days)
 Applies to transfers on or after 1 May 2014
 No additions to the information to be provided
 Continue to seek indemnity protection or price
adjustment mechanism for failure to provide information
or provision of inaccurate information