The Transfer of Undertakings (Protection of Employment) Regulations 2006 have been published.
No big surprises after the draft (apart from removal of the professional services exemption from the new 'service provision change' concept).
Here are some of the main changes from the existing 1981 Regulations:
- it incorporates much of the caselaw that has developed since 1981 (including Litster and Beckmann), putting it on a statutory basis
- it is made clear that 'service provision changes' (i.e. first and subsequent generation contracting-out, and contracting-in) are covered by TUPE, when there is an organised grouping of employees whose principal purpose is to carry out the contracted-out activities. There is an exception if the service is for a single specific event or task of short-term duration. This has potentially serious implications for large solicitors firms, with one or more lawyers (largely) dedicated to servicing a particular client, which then moves its instructions to another firm
- variations to contracts of employment are void, unless
o the principal reason for the variation is an economic, technical or organisations reason entailing changes in the workforce; or,
o the transferor is insolvent, and either the transferor or transferee agrees the variations with the appropriate representatives of the employees (i.e. a trade union or elected employee representatives)
- liability for redundancy, notice and other payments to employees of insolvent companies are NOT transferred to the transferee.
- the transferor is obliged to provide 'employee liability information' to the transferee at least a fortnight before the transfer. This includes information about:
o the identity and age of employees
o their statement of terms and conditions of employment
o any disciplinary proceedings or grievance issued in the last two years
o any court or tribunal cases brought by the employees in the last two years, or any court or tribunal cases which the transferor has reasonable grounds to believe that an employee might bring
o any collective agreement which will have effect after the transfer
Failure to provide this information will enable the transferor to bring a claim against the transferee (in an employment tribunal) for such compensation as is just and equitable having regard to any loss suffered by the transferor. There is a minimum award of £500 per employee, unless the tribunal considers it just and equitable to award a lesser sum.
- the transferor will be liable (jointly with the transferee) for awards for failure to inform and consult with a trade union or employee representative.
The transitional provisions are as follows:
- the 2006 Regulations apply to any transfer which takes place on or after 6th April 2006; but,
- the duty on a transferor to provide a transferee with employee liability information shall not apply to a transfer which takes place on or before 19 April 2006
Click here to view TUPE 2006