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Changes to TUPE: a more business friendly approach

31/01/2014

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United Kingdom

Today sees the introduction of changes to TUPE, the legislation which protects employees in a transfer situation in the UK.

Today sees the introduction of changes to TUPE, the legislation which protects employees in a transfer situation in the UK.  The changes will affect all employers, including franchisors and franchisees, for example on the creation or assignment of a franchise, or on its termination.    The changes follow a call for evidence and subsequent consultation by the UK Government, whose stated aim was to improve and simplify TUPE and to remove any unnecessary "gold plating" of the EU Acquired Rights Directive. The final amendments are perhaps not as far reaching as originally envisaged, but they do include a number of business friendly changes which should give franchisors and franchisees (particularly micro businesses employing less than 10 employees) greater flexibility when dealing with people issues in a transfer situation.    The changes include:

  • greater flexibility to vary the terms and conditions of the transferring staff, particularly if the existing terms and conditions permit the employer to make such a variation (i.e. where there is a mobility clause in the employment contract allowing a reasonable change in the employee's place of work);
  • the right in large scale transfers, where 20 or more redundancies are proposed, to commence collective redundancy consultation prior to the transfer, provided the transferor and transferee agree and the transferee carries out meaningful consultation. 
  • an extended timeframe for the provision of employee liability information.   From 1 May 2014, the information will have to be given 28 days before the transfer, rather than the current 14 days, unless it is not reasonably practical; the thinking being that the earlier a party receives the information, the earlier they will be able to plan for the transfer of staff; and
  • from 31 July 2014, micro-businesses (employing less than 10 employees) will be allowed to inform and consult affected employees directly when there is no recognised independent union, nor any existing appropriate representative.

These changes form a broader package of reforms introduced by the UK Government over the last four years to improve the laws around taking people on, managing staff and letting people go. 

For more details about the changes to TUPE and other employment law reforms in the UK, please do speak to a member of our Employment and Pensions team or contact Nicholas Thorpe.

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