TUPE: Service provisions changes (SPCs) will stay
In September the Government published a response to its Consultation on changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).
The most radical change put forward by the Government will not now go ahead – namely the repeal of the 'service provision changes'.
The TUPE rules on service provision changes mean that outsourcing, retendering and bringing services back in-house all usually come within the scope of the TUPE 2006 Regulations, so that the employer's rights, duties and liabilities in relation to affected employees pass over to the 'transferee'.
Whilst this can be onerous for the parties involved, the rules provide much-needed certainty and produce a level playing field for businesses. The government has therefore accepted that they should be retained.
However it will amend TUPE to specify that in order for there to be a service provision change the activities carried on must be "fundamentally or essentially the same" as before the transfer.
Other changes that will be made to TUPE are:
- The time for the transferor to provide employee liability information (e.g. names, basic employment terms, records of disciplinaries and grievances etc) to the transferee will be increased to 28 days before the transfer
- A change in the location of a workforce will fall within the scope of an ETO reason entailing changes in the workforce
- TUPE consultation which begins prior to the transfer may satisfy collective redundancy consultation requirements (provided certain conditions are fulfilled)
- Micro businesses will be allowed to inform and consult directly with employees
- Variation of contractual terms after a transfer may be slightly easier to make providing they are not "by reason of the transfer" (currently variations are void if the reason is the transfer or "connected with the transfer" – which is arguably wider, but it is not clear how much leeway this change in wording will actually give)
- Variations which are already authorised by the employee's contract will not be void just because of the transfer
- Renegotiation of terms derived from collective agreements will be allowed one year after the transfer providing the terms are no less favourable
- The transfer of terms from collective agreements will be 'static' in line with recent European case law (meaning terms do not change when a collective agreement not involving the transferee is renegotiated).
BIS anticipates that the changes will be laid before Parliament in December 2013, potentially coming into force as early as January 2014.