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Employment law changes: TUPE or not TUPE

03 March 2014

Changes to the Transfer of Undertakings (Protection of Employment) Regulations, or TUPE for short, came into force on 31st January 2014.

Although these employment law reforms do not go as far as suggested in the initial consultation proposals last year, they have been broadly welcome by employers as a step in the right direction, in terms of removing some of the unnecessary ‘gold-plating’ and unwieldy bureaucracy that has been a bone of contention in the past.

Announcing the new regulations, employment relations minister Jo Swinson said the changes would: “remove unfair legal risks that businesses currently face, give businesses more legal certainty in what they can do and reduce the bureaucracy of a transfer”.

Nevertheless, businesses that are considering buying or selling a business or part of a business, or taking on (or losing a contract), still need to check if and how TUPE may affect them.

When does TUPE apply?

One of the main changes is to when TUPE actually applies. The amendments now make it clear that for TUPE to apply, the activities to be carried out after the transfer must be “fundamentally the same as the activities carried out previously.” This potentially gives organisations more wriggle-room to argue that activities post-transfer have changed and therefore TUPE does not apply.

Another key change is the right for employers to renegotiate staff benefits one year after they have been transferred to the business. Previously, employees' terms and conditions were protected and were generally not allowed to be changed following a business transfer. Under the new rules, however, employers can make amendments as long as the overall changes are "no less favourable" to employees.

Rules on changes to the place of work were also amended. Previously, if an employer changed the place of work, any staff made redundant as a result of the change could automatically claim unfair dismissal. Under the new rules, redundancies will not automatically be unfair.

"This means that, as a starting point, businesses will not face possible unfair dismissal claims simply because of a change in location of the workplace,'' said the Department for Business, Innovation and Skills in a statement.

Ease employment law bureaucracy

Small businesses with fewer than ten employees also gain some relief from bureaucracy, as they are now allowed to inform and consult employees directly when there is no recognised trade union or other representatives.

These changes to the employment law framework, together with suggestions that courts and tribunals are taking a more flexible approach as to when TUPE applies, should help make business or contract transfers a slightly less risky or stressful process for employers.

How Lyons Wilson can help

Our specialist team of employment solicitors in Manchester has acted for major companies in relation to a range of employment issues, such as TUPE, unfair dismissals and settlement agreements, as well as employees at all levels, including directors of PLCs, major private companies and public sector organisations.

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