U.K. Finalizes TUPE Changes

By Alex Denny, Victoria FitzGerald, Emma Vennesson Mar 10, 2014

Significant changes to the United Kingdom’s Transfer of Undertakings (Protection of Employment) regulations known as TUPE came into force on Jan. 31, 2014, and apply, with some exceptions, to transfers occurring on or after this date. TUPE law protects employees if the business in which they are employed changes hands. Its effect is to move employees and any liabilities associated with them from the old employer to the new employer.

A number of the changes primarily improve flexibility for employers.

Relocations now fall within the scope of the “economic, technical or organizational reason entailing changes in the workforce” (ETO) defense. This means that it should be easier to dismiss employees because of a change in location; something which is common in outsourcing situations.

The concept of a “service provision change” will remain, but the activities post-transfer must now be “fundamentally or essentially the same” as those carried out pre-transfer. This additional wording reflects recent case law and should help employers determine whether TUPE applies in each case.

Changes to terms and conditions “by reason of the transfer” can now be made, provided there is an ETO reason for the change or the contract of employment allows the employer to make the change.

Employee liability information must be provided at least 28 days before the transfer (rather than 14 days as currently) for transfers on or after May 1, 2014.

Small businesses (with fewer than 10 employees) will be allowed to inform and consult affected employees directly (rather than through representatives) for transfers on or after July 31, 2014.

The changes are not as far-reaching as originally envisaged. However, given that the changes are being introduced gradually, it will be important to check the current TUPE position whenever a transfer is proposed to which TUPE applies or may apply.

Alex Denny is a partner, Victoria FitzGerald an associate and Emma Vennesson an associate in Faegre Baker Daniels’ London office.

Copyright 2014 © Faegre Baker Daniels LLP. All rights reserved.

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