THE NEW TUPE REGULATIONS ASSOCIATION FOR PUBLIC SERVICE EXCELLENCE 14 MARCH 2014 Presented by: Richard Clegg DAC Beachcroft LLP Tel: 0161 934 3074 Email: rclegg@dacbeachcroft.com
Changes to the TUPE Regulations Changes came in on 31 January 2014 What are the changes? What are the practical impacts of these changes for councils?
Overview of the changes Clarification of what amounts to a service provision change Loosening restrictions on changes to terms and conditions Static rather than dynamic approach to the transfer of terms of collective agreements Relocations and ETO Reasons Opportunity to start collective redundancy consultation pre-transfer Employee liability information to be provided 28 days pre transfer
Service provision changes (1) Old position: TUPE applied where an employer engaged a contractor to do work on its behalf, engaged a different contractor to do that work in place of the first contractor, or brought the work in-house New position: TUPE applies in these circumstances, as long as the activities being carried out after the transfer are fundamentally or essentially the same as before the transfer
Service provision changes (2) What does this mean for councils? Aims to give greater certainty to the application of TUPE when outsourcing, insourcing, or changing a service provider Greater certainty will reduce management time involved in negotiating a transaction, and the risk of litigation arising as a result of the transaction But still not entirely certain.
Changing terms and conditions (1) Old position: changes void if the sole or principal reason is: the transfer itself a reason connected with the transfer which is not and economic, technical, or organisational ( ETO ) reason entailing changes in the workforce New position: changes void if the sole or principal reason is the transfer
Changing terms and conditions (2) When can you change terms and conditions? If the transfer is not the sole or principal reason for the change, but the reason is otherwise connected to it. If the transfer is the sole or principal reason for the change but: there is an ETO reason and the employer and employee agree to the change the change is permitted by the employment contract
Changing terms and conditions (3) When can you change Terms and Conditions? If the reason is not the sole or principal reason, but another reason connected with the change. How useful will this be? If the sole or principal reason is the transfer but: there is an ETO and employer and employee agree change permitted by the contract e.g. flexibility or mobility collective agreement (see next slide) Caution: there is the risk of a material detriment claim under Regulation 4(9)
Relocation of the workforce (1) Old position: relocation of the workforce was not by itself an ETO reason, meaning that change of location redundancies where there was no other ETO reason were automatically unfair under TUPE New position: relocation of the workforce is expressly included as an ETO reason
Relocation of the workforce (2) What does this mean for councils? Dismissals as a result of a change of location could be potentially fair on the basis of redundancy Where an employee wants to relocate, the contract could now be varied by agreement in order to provide for the new location
Collective agreements (1) Old position: contractual terms derived from collective agreements are treated in the same way as other contractual terms when making changes in the context of a TUPE transfer case law has determined that the terms that transfer are those which exist at the time of the transfer (the static approach), rather than those which occur post transfer, and the transferee has not negotiated
Collective agreements (2) New position: contractual terms derived from collective agreements can be varied after more that a year has passed since the transfer, provided that overall the contract is no less favourable to the employee static approach derived from case law now codified
Pre-transfer Collective Redundancy Consultation (1) New s.198a into the Trade Union and Labour Relations (Consolidation) Act 1992 where: there is to be, or is likely to be, a relevant transfer transferee proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less one or more of the transferor s employees who will, or is likely to, transfer may be affected by dismissal or measures in connection with it
Pre-transfer Collective Redundancy Consultation (2) Co-operation: Transferee is reliant on transferor s cooperation Consultation: Risk of not completing consultation prior to the transfer. Who should the transferee consult with? Can notice be given pre-transfer? Transferor cannot rely on transferee s ETO reason Pooling: Transferee will need to consider whether the transferring employees will need to pool with existing employees
Employee liability information To be provided at least 28 days before the transfer (previously 14 days) Applies to transfers on or after 1 May 2014 No additions to the information to be provided Continue to seek indemnity protection or price adjustment mechanism for failure to provide information or provision of inaccurate information