Tupe changes will allow employment term renegotiation

Employers will be able to renegotiate the terms and conditions of employees when transferring them between businesses, as part of changes announced by the government to Transfer of Undertakings (Protection of Employment) (Tupe) regulations.

This is provided that the overall change is no less favourable for an employee than their previous terms.

The government’s announcement, which is a response to a consultation on Tupe regulations earlier this year, also reveals that where employees have terms and conditions provided for in collective agreements, only the terms and conditions in the collective agreement existing at the time of the transfer will apply to employment with the new employer.

Clarification of the rules on service provision changes will also be provided. The government will set out part of the test, which determines whether there has been a service provision change. For a change to have happened, the activities carried on after the change must be fundamentally or essentially the same as those carried on before it.

Employment relations minister Jo Swinson said: “Tupe rules are essential to making sure that when a business is transferred from one [organisation] to another, it happens in a fair and efficient way. There have been some areas of the law which created uncertainty and confusion for businesses trying to comply with the law.

“By making these changes, we will clear out the cobwebs in some of the rules, which will give businesses more clarity about conducting transfers. As part of the Red Tape Challenge we are reforming these rules, keeping in place the necessary protections for employees and helping support a stronger economy.”

Tim Thomas, head of employment policy at EEF, the manufacturers’ organisation, added: “This announcement will remove some of the Tupe gold-plating, which covered dismissals and changes contracts, and help ease the burden of Tupe. These are reforms businesses need and have been waiting for.

“But Tupe will remain, even after these changes, a significant impediment for many businesses. Many of these changes will not provide the legal certainty employers and workers both need. Employee liability information remains too little, too late, and smaller businesses, in particular, need greater flexibility to reform terms and conditions after a transfer.”

The new rules will go before Parliament in December 2013.