Infologue.com Workplace contributor and labour lawyer of Beers Solicitors, Paul Housego discusses changes to Tupe in his latest article. Paul writes:
“Tupe has changed again. There are some new regulations which change things in several important respects, mainly for transfers on or after 31st January 2014.
“Perhaps the most important one is that the transferors obligation to give the transferee employee information now has to be at least 28 days before the transfer, rather than 14. With clients wanting to change contracts swiftly, 14 days was hard enough. There are not many cases where transferee goes after the transferor for breach of this regulation. It tends to come up where the employees claim that they have not been properly consulted, and so claim an award, the starting point for which is 13 weeks’ pay. That will bring in the “get out of jail free” reg 15(2) – which provides that it is, or may be, and excuse if the employer shows that it was not reasonably practicable to perform that duty, and that the employer had taken all steps that were reasonably practicable. The word “all” means the defence will fail if there is anything that it was reasonable to do and it was not done. It is a high hurdle. The paper trail is going to be really important, in particular internal management emails where the question of what else could be done to inform and consult is actively considered.
“If the transfer will involve redundancies, then so long as the transferoror agrees, it is now going to be permissible for the transferee to consult with the transferor’e employees about redundancies that will take place after the transfer. This should help with the 28 day consultation period, because some of the 28 days can be before the transfer, even though it involves the transferor’s employees. The difficulty, of course, is that if the transfer or does not agree this does not apply. And it only applies if there are to be 20 or more redundancies in a 90 day period. So much for regulation becoming less complicated.
“Next, there is the ability to vary contracts of employment post transfer. Previously, if the reason a contract was varied was a transfer then that variation was void. Sometimes that did not become clear for quite some time. Now, from 31st January 2014 contracts can be varied even if the reason is a transfer. But this is not as wide as it seems – there are several preconditions. The change must be because of an economic technical or organisational reason entailing changes in the workforce. This is a highly technical area, and so is a trap for the unwary. Secondly, the variation has to be agreed – it cannot be imposed. Thirdly, in accordance with ordinary contract law, the contract has to permit such a variation. The message is not to be seduced by the simple headline that contracts can now be varied subsequent to a tupe transfer.
“There is a new provision which removes from “microbusinesses” the obligation to elect representatives from the “inform and consult” part of the tupe regs. These are those with fewer than 10 employees. That is, up to 9, on all contracts. The duties owed to representatives in a tupe situation are complied with if each person affected is treated as if he was his own representative. Otherwise nothing changes. Who is the employer? Transferor or transferee? Either. If one or the other has 9 or fewer pre transfer that is the employer that does not have to elect representatives. Beware! This change is for transfers on or after 31st July 2014.
“There is also clarification that if there is an economic technical organisational reason involving changes in the workforce, and that results in dismissals, those dismissals are not rendered automatically unfair because the transfer was the reason for them, if they are genuine redundancies or are for “some other substantial reason”, and other provisions about election of representatives that may be relevant and important – they are too technical for this piece, but if the question of representatives comes onto your radar, do check out the new regulations. They can be found at:-http://www.legislation.gov.uk/uksi/2014/16/pdfs/uksi_20140016_en.pdf“