Welsh social landlords should celebrate changes to employment law

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A recent Welsh Government report, Sector risks facing housing associations in Wales, highlighted the financial challenges facing housing providers in Wales.

The report considered the benefits of diversification, collaboration and partnership working. Given the huge pressure on local authority finances and reduced funding for services and supporting people contracts, it is vital that you  understand the staffing issues and costs before entering into contracts and  understand your legal obligations when handing services back.

So, the new Transfer of Undertakings (Protection of Employment) Regulations ("TUPE") which came into force on 31 January are good news as they provide greater certainty for housing providers. The objective of TUPE is to protect and maintain the terms and conditions of employment of employees when they are moved to a new employer, either through a service provision change (for example the outsourcing of a service) or the sale of a business or part of a business.

Key changes include:

  • Clarification of what is meant by a ‘service provision change’ which will only occur if the activities carried on after the transfer are ‘fundamentally or essentially the same’ as those carried on before it
  • The transferor is obliged to provide the transferee with ‘employee liability information’.  This is key information about its employees such as the identity and age of employees, the main terms of employment, any disciplinary/grievances in the last two years,  The UK  government accepted that the deadline by which the information has to be provided should be increased from 14 days to 28 days before the transfer. This applies to transfers that take place on or after 1 May 2014
  • The new regulations still provide that variations to the transferring  employee’s contract will be void if the sole or principal reason for the variation is the transfer. However, contracts can be varied if the sole or principal reason for the variation is an economic, technical and organisational reason entailing changes in the workplace. This is subject to the employer and employee agreeing to the variation, or if the terms of the contract permit the employer to make that change
  • A change in the location of the workforce following a transfer will be included in the scope of an ETO reason entailing changes in the workforce. Therefore, a dismissal or variation to the employee’s contract will be potentially fair
  • Transferees may re-negotiate terms derived from collective agreements one year after the transfer, provided the changes are no less favourable to the employee
  • A transferee No – it is the transferee – ie the receiving employer will not be bound by terms negotiated as part of a collective bargaining process after the relevant transfer where the transferee is neither a party to those subsequent collective agreements nor to the bargaining process for them
  • Consultation which begins before the transfer can satisfy the collective redundancy consultation obligations if the transferor and transferee agree and the transferee carries out meaningful consultation
  • There is still protection against dismissal but a dismissal before or after the transfer is automatically unfair if the sole or principal reason for it is the transfer (rather than a dismissal for a transfer-connected reason). Where the sole or principal reason for the dismissal is an ETO reason, the dismissal will not be automatically unfair 

This enhanced flexibility should help housing providers in providing essential services.

This article features in Inside Housing.