sTUPEndous changes in employment law

TUPE – or to give the full, catchy title – The Transfer of Undertakings (Protection of Employment) Regulations – have been the main legal instrument governing employment rights on the transfer of a business or undertaking for a quarter of a century. Andrew Fleming a partner at Blocks Solicitors looks at the new regulations.

These veteran regulations – which have generally been judged to be fair and sensible – are being updated as from the 6 April this year. The new regulations make a number of changes, the main ones being: –

1. The ambit of the definition of a “transfer of undertaking” is widened, so that changes in the provision of services such as outsourcing are more likely to be covered by TUPE. This should create greater certainty (and thus less litigation) for all concerned.

2. There is clarification of what rights, duties and liabilities of employees are automatically transferred. Pensions relating to old age, invalidity or survivors benefits are not automatically transferred although other benefits may be.

3. Assistance is given to help define whether a part time worker will be ‘assigned’ across on the transfer of an undertaking. There must be a transfer of that part of the business which formed the “organisational framework” of the employment relationship and relevant factors include but are not limited to the amount of time worked.

4. The new regulations make clear that where an employee is dismissed or where his or her terms of employment are downgraded for reasons connected to the transfer otherwise than for a proper economic, technical or organisational reason, such dismissal will be automatically unfair and such downgrading may constitute constructive dismissal.

5. Greater flexibility is given, however, in circumstances of the insolvency of an employer where “permitted variations” in contracts of employment are allowed via elected representatives of the employees who may agree to lower quality of working conditions in order to safeguard the viability of the business and preserve jobs.

6. There is a new requirement for the transferor of any undertaking to give prescribed details of all employees to the transferee at least fourteen days before the effective date of transfer.

7. Both transferor and transferee will now be jointly liable for the existing duty for consultation talks with employees prior to a transfer.

In short the new Regulations make commonsensical amendments to take into account the practical shortcomings of the 1981 ones, but remain complex and onerous.

For more information please contact Andrew Fleming at arf@blockslegal.co.uk