Under ‘The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 there are various amendments to TUPE 2006, which I set out below.
Regulation 3 (A relevant transfer)
The original text of the regulation remains unchanged, however clarification has been provided in relation to service provision changes under reg 3(1)(b) by the insertion of a new subsection 2A.
Reg 3(2A) provides that references in reg 3(1)(b) to ‘being carried out instead by another person’ (including the client) are to activities which are “fundamentally the same as the activities carried out by the person who has ceased to carry them out. “ The intention is that the section reflects the existing case law, i.e. that the activities are fundamentally or essentially the same.
This amendment only applies to transfers on or after 31/01/2014.
Regulation 4 (Effect of relevant transfer on contracts of employment)
A variation of contract is still void if the sole or principal reason for the variation is the transfer. An ETO reason is still an exception providing that the employer and employee agree the variation. A new exception is that the terms of the contract permit the employer to make such a variation [see Reg 4(4), (5)(a)&(b)].
Under a new reg 5A ‘changes in the workforce’ is defined as including a change to the place where employees are employed or to the carrying out of work of a particular kind. Place of work has the same meaning as in S139 ERA (see the cases on redundancy).
A further exception to Reg 4(4) is included under new reg 5B in respect of terms or conditions incorporated from a collective agreement providing that: (1) the variation occurs more than a year after the date of the transfer and (2) following the variation the rights and obligations in the contract, when considered together, are no less favourable to the employee than those which applied immediately before the variation.
Under new reg 5C the normal legal principles for effective variation still apply, e.g. employee consent.
These amendments apply to any purported variation of contract subject to a TUPE transfer if the transfer takes place on or after 31/01/2014 and that the variation is agreed on or after 31/01/2014, or in the case where it is not agreed starts to have effect after that date.
Regulation 4A (Effect of relevant transfer on contracts of employment which incorporate provisions of collective agreements)
This is a new section which provides that rights, powers etc under collective agreements are not transferred if the provision of the collective agreement is agreed after the date of transfer and the transferee is not a participant in the collective bargaining for that provision. This only applies to transfers after 31/01/2014. For pre 31/01/2014 transfers the meaning of the regulations in relation to this issue is being considered by the Supreme Court following the CJEU Judgment in Alemo-Herron v Parkwood Leisure C-426/11.
Regulation 7 (Dismissal of employee because of relevant transfer)
Regs 7(1) to (3) have been replaced. If the sole or principal reason for dismissal is the transfer the dismissal is still automatically unfair (reg 7(1)) however there is still an ETO exception, if the ETO reason entailing changes in the workforce is the sole or principal reason for dismissal. ‘Changes in the workforce’ includes changes in the place or work or carrying out work of a particular kind. The changes only apply to transfers after 31/01/2014.
Regulation 9 (Variations of contract where transferors are subject to relevant insolvency proceedings)
Reg 9(7) is amended to reflect the change in wording to Reg 4(5)(a) (see above) and applies to cases where the transfer is on or after 31/01/2014 and the permitted variation is agreed on or after that date.
Regulation 11 (Notification of Employee Liability Information)
In relation to transfers which take place after 01/05/2014 the requirement in reg 11(6) to provide notification by the transferor to the transferee of employee liability information not less than 14 days before the relevant transfer is extended to not less than 28 days before the relevant transfer.
Regulation 13A (Micro-business’s duty to inform and consult where no appropriate representatives.
This is a new section which applies to: (a) employers employing less than 10 employees, and (b) there are not any appropriate representatives within the meaning of reg 13(3) (e.g. representatives of a trade union or elected employee representatives) and (c) the employer has not invited any of the affected employees to elect representatives. If all of the conditions are satisfied the employer can comply with its reg 13 duties relating to appropriate representatives as if each of the employees was an appropriate representative.
This provision applies to transfers on or after 31/07/2014.
Regulation 15 (Failure to inform and consult)
Reg 15(3) is amended by adding “except where the question is whether or not regulation 13A applied” and therefore takes into account new reg 13A.
A new Reg 15(3A) is added to require the employer to show that the conditions in Reg 13A(1)(a) & (b) (see above) if there is a question that reg 13A applied at the time.
These provisions apply to transfers on or after 31/07/2014.
General
The effect of the amendments is generally to codify the existing case law and in some respects to simplify the existing legislation. However the provisions to allow variation of contracts are likely to be a fertile area of litigation, particularly over the question of whether a clause permitting a variation was in fact incorporated for the sole or principal reason of a transfer and if so whether it is void.