Government publishes TUPE amendment regulations

•    Draft regulation 5, which amends the definition of a service provision change and provides that the SPC rules will only apply where the activities carried out by the new contract are “fundamentally the same as the activities carried out previously”. It is likely that the previous guidance on when there is and when there is not a fundamental change in cases such as Metropolitan Resources Ltd v Churchill Dulwich Ltd [2009] IRLR 700, Enterprise Management Services Ltd v Connect Up Ltd [2012] IRLR 190 and Johnson Controls Ltd v Campbell and the Atomic Energy Authority (EAT/0041/12) will still be relevant;

 

•    Draft regulation 6, which makes it clear that a change in place of employment within the meaning of Section 139(1) of the Employment Rights Act 1996 can amount to an ETO for the purpose of Regulation 4(4) and Regulation 7(2) of TUPE 2006;

 

•    Draft Regulation 8, which makes it clear that a dismissal of an employee under Regulation 7 of TUPE 2006 will only be automatically unfair if the reason for dismissal is the transfer. An equivalent amendment is made to Regulation 4 of TUPE 2006. The intention here is to narrow the circumstances in which a dismissal is automatically unfair or a variation in terms is void by excluding the reference to ‘a reason connected with the transfer’ but the significance of this change remains to be seen given the interpretation what the ECJ’s interpretation of 4 of the Acquired Rights Directive (see for example the Daddy’s Dance Hall case [1988] IRLR 315) as applied by the House of Lords in Wilson v St Helens Borough Council [1998] IRLR 786;

 

•    Draft Regulation 6(1)(b), which amends Regulation 4(5) of TUPE 2006 and states that a variation in contract will not be automatically void even if the reason for the variation is the transfer itself if “the terms of [that] contract permit the employer to make such a variation”.  In other words the TUPE rules will not prevent amendments that are made where the contract itself provides for an express right to vary terms of employment.  This change is potentially significant as it will restrict the TUPE rules to cases where there is no express right to vary in the contract. It is unclear what effect this change has on Regulation 4(9) which entitles an employee to treat the contract as being terminated where there is a substantial change in working conditions to the material detriment of the employee (i.e. whether changes made as a result of an express right to vary are excluded from this provision). If so, this would represent a return to the law as stated in Rossiter v Pendragon plc [2002] IRLR 483. If so, this amendment may be open to challenge under EU Law;

 

•    Draft Regulation 6(1) which permits changes made to collectively agreed terms after 1 year of the date of transfer provided the changes when considered together are no less favourable to the employee than those which applied immediately before the variation but this amendment only applies to changes made by way of a collective agreement;

 

•    Draft Regulation 7 which provides that where a contract of employment incorporates provisions of a collective agreement, for example on pay rates, and the provision of the collective agreement comes into force after the date of transfer and the transferee is not a party or participant in the collective bargaining process, the change will not bind the transferee. This represents the so called ‘static’ approach approved by the CJEU in Parkwood Leisure Ltd v Alemo-Herron [2013] IRLR 744;

 

•    Draft Regulation 10 which amends the deadline by which ELI information has to be provided pursuant to Regulation 11 of TUPE 2006 from 14 days to 28 days before the transfer;

 

•    Draft Regulation 11 which clarifies the consultation requirement pursuant to Regulation 13 of TUPE 2006 where there are no employee representatives and the employer has not invited its employees to elect representatives and the employer employs fewer than 10 employees and permits TUPE information to be given to staff individually and for consultation to take place with each of the employees (or possibly) with the employees as a group. 

 

The draft Regulations also make various other changes to collective consultation both under TUPE 2006 and under the Trade Union and Labour Relations (Consolidation) Act 1992. The detailed changes are set out in Draft Regulation 3.

 

The changes are expected to come into force in January 2014, although at the time of writing, the precise implementation date is unknown.