Government To Retain SPC

Sun, 15 Sep 2013

By Anthony Korn

The Government has decided not repeal the TUPE rules on service provision change. Anthony Korn summarises the Government’s response to the Consultation document published earlier this year.

The Government has decided not to repeal Regulation 3(1)(b) of the Transfer of Undertakings Regulations 2006 dealing with changes in service provider. However, the Government is to amend the Regulations to reflect case law developments that the SPC rules will only apply where the service remains ‘fundamentally or essentially the same’ as that carried out by the previous contractor.

The Government’s ‘about turn’ comes as a surprise as the Consultation document published earlier this year suggested that it was committed to repeal the SPC rules on the grounds that the rules were ‘anti-competitive’ and amounted to unnecessary ‘gold plating’ of the EU Directive. However, the Government appears to have been persuaded that a return to the pre-2006 would have created considerable uncertainty as to when TUPE applied and has accepted that in this instance a certain amount of gold plating is justified.

Other changes proposed by the Government are:-

·      To allow changes to be made to collectively agreed terms after one year provided the overall effect of the change is “no less favourable to employees”;

·      To provide expressly that a third party is not bound by terms previously collectively agreed between the transferor and trade unions after the transfer takes place other than those that have retrospective effect-the so called “static’ approach approved by the CJEU in Parkwood Leisure Ltd v Alemo-Herron [2013] IRLR 744;

·      To provide expressly that a change in location potentially amounts to an ETO within the meaning of Regulation 7(1) and 7(2) of TUPE thereby preventing genuine workplace redundancies from being unfair;

·      To amend Regulation 4(4) and Regulation 7 to bring them closer to the language of Article 4 of the Directive: dismissals will only be automatically unfair if they are “by reason” of the transfer;

·      To amend Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 to make it clear that consultation which starts before the transfer can count for the purpose of the collective redundancy rules provided that the consultation is ‘meaningful’;

·      To amend the rules on the provision of ‘Employer Liability Information’ to ensure that ELI is given 28 days before the transfer rather than 14 days before the transfer.

Apart from the retention of the rules on service provision change, the Government has decided not to go ahead with its earlier proposal to allow the transferor to rely on the ETO of the transferee thereby enabling the transferor to dismiss employees for the transferee’s ETO reasons prior to the transfer and has also decided not to repeal Regulation 4(9) dealing with the circumstances in which an employee may complain of constructive dismissal in a TUPE situations.

The Government is proposing to introduce amending Regulations before Christmas. There will be transitional and saving provisions.

The implications of these changes will be considered once the amending Regulations are published.  

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