HMO Quarterly Employment Bulletin – March 2014
This bulletin covers the changes brought in to TUPE by new regulations.
These regulations came into effect on 31 January 2014 and update 2006 regulations.staff party is to boost morale and foster team spirit, if not handled properly the reverse affect can be achieved and an employer exposed to potential claims.
TUPE regulations apply when a business is sold, activities are outsourced or brought back in house.
The general principle is that when employees are transferred to a new business, their terms and conditions and continuity of service move with them.
This bulletin cannot cover the full impact of the changes but we hope that this might provide a useful checklist of changes should you become involved, whether as an employer or an employee, in a business transfer. For the avoidance of doubt this checklist relates only to the changes in the legislation.
1. Service Provision
In an attempt to reduce ambiguity the regulations indicate now that for outsourced work to be covered by the regulations, the work to be done in the future must be “fundamentally the same”.
2. Alteration of Terms and Conditions
The altering of terms of employment by the new employer will continue to be void if “the sole or principal reason” is the transfer. However the previous additional trigger of a reason “connected to the transfer” is removed.
Note that the economic technical or organisational (“ETO”) exception continues to apply. That is that there is an economic, technical or organisational reason for the transfer and the reason “entails changes in the workforce”.
3. Removal of the automatic unfairness of a change in location following transfer. A change in location may still lead to a finding that there has been an unfair constructive dismissal, but it will not be regarded as automatically unfair as previously
4. Collective Agreements: The new 1 Year Rule
Collective agreements may be changed after 1 year of the transfer.
The proviso is that the terms concluded must overall be no less favourable
5. Collective Agreements: The Static Principle
A new employer is only bound by the terms and conditions applying to the transferring employees as at the time of transfer and is not bound by any terms subsequently negotiated by the former employer after the transfer.
6. Express Dismissal on Transfer
Here the same principle now applies as where there is no express dismissal but the employee claims constructive dismissal. That is to defend the claim for unfair dismissal it will be necessary for the employer to show that an ETO reason entailing changes in the workforce is the reason for the dismissal; and that a fair dismissal procedure has been applied. Note, as the reason will amount to redundancy the further requirements surrounding redundancy will need to be observed.
7. Earlier Consultation upon Redundancy
Where the new employer intends making 20 or more redundancies after the transfer by agreement with the old employer collective redundancy consultation may begin before the transfer.
8. The information to be given by the old to the new employer is to be given earlier.
Previously this information (about the transferring employees) was to be given no later than 14 days before the transfer. The period has been extended to 28.
9. Consultation
The law requires election of employee representatives for consultation upon the transfer. The regulations have brought in an exception in relation to small businesses having less than 10 employees. They no longer have to arrange an election if no representatives are in place for the purpose of consultation.
All the amendments take immediate effect except number 8 which takes effect on 1 May 2014 and number 9 on 31 July 2014
The Government and ACAS recognise that TUPE remains a complex area of law. ACAS is currently formulating further guidance and you should consider taking legal advice when involved in transactions which are subject to the TUPE regulations.
HMO Quarterly Employment Bulletin – March 2014
This bulletin covers the changes brought in to TUPE by new regulations.
These regulations came into effect on 31 January 2014 and update 2006 regulations.staff party is to boost morale and foster team spirit, if not handled properly the reverse affect can be achieved and an employer exposed to potential claims.
TUPE regulations apply when a business is sold, activities are outsourced or brought back in house.
The general principle is that when employees are transferred to a new business, their terms and conditions and continuity of service move with them.
This bulletin cannot cover the full impact of the changes but we hope that this might provide a useful checklist of changes should you become involved, whether as an employer or an employee, in a business transfer. For the avoidance of doubt this checklist relates only to the changes in the legislation.
1. Service Provision
In an attempt to reduce ambiguity the regulations indicate now that for outsourced work to be covered by the regulations, the work to be done in the future must be “fundamentally the same”.
2. Alteration of Terms and Conditions
The altering of terms of employment by the new employer will continue to be void if “the sole or principal reason” is the transfer. However the previous additional trigger of a reason “connected to the transfer” is removed.
Note that the economic technical or organisational (“ETO”) exception continues to apply. That is that there is an economic, technical or organisational reason for the transfer and the reason “entails changes in the workforce”.
3. Removal of the automatic unfairness of a change in location following transfer. A change in location may still lead to a finding that there has been an unfair constructive dismissal, but it will not be regarded as automatically unfair as previously
4. Collective Agreements: The new 1 Year Rule
Collective agreements may be changed after 1 year of the transfer.
The proviso is that the terms concluded must overall be no less favourable
5. Collective Agreements: The Static Principle
A new employer is only bound by the terms and conditions applying to the transferring employees as at the time of transfer and is not bound by any terms subsequently negotiated by the former employer after the transfer.
6. Express Dismissal on Transfer
Here the same principle now applies as where there is no express dismissal but the employee claims constructive dismissal. That is to defend the claim for unfair dismissal it will be necessary for the employer to show that an ETO reason entailing changes in the workforce is the reason for the dismissal; and that a fair dismissal procedure has been applied. Note, as the reason will amount to redundancy the further requirements surrounding redundancy will need to be observed.
7. Earlier Consultation upon Redundancy
Where the new employer intends making 20 or more redundancies after the transfer by agreement with the old employer collective redundancy consultation may begin before the transfer.
8. The information to be given by the old to the new employer is to be given earlier.
Previously this information (about the transferring employees) was to be given no later than 14 days before the transfer. The period has been extended to 28.
9. Consultation
The law requires election of employee representatives for consultation upon the transfer. The regulations have brought in an exception in relation to small businesses having less than 10 employees. They no longer have to arrange an election if no representatives are in place for the purpose of consultation.
All the amendments take immediate effect except number 8 which takes effect on 1 May 2014 and number 9 on 31 July 2014
The Government and ACAS recognise that TUPE remains a complex area of law. ACAS is currently formulating further guidance and you should consider taking legal advice when involved in transactions which are subject to the TUPE regulations.