10 December 2018 - Article
Most employers are familiar with the term 'TUPE'. It is shorthand for the Transfer of Undertakings (Protection of Employment) Regulations, which protect the rights of employees when their employer changes as a result of a transfer of a business.
TUPE was introduced into the UK 25 years ago and has remained largely unchanged, despite the huge changes in industry since that time. Now, at last, there has been an overhaul of the Regulations and the ageing 1981 version of TUPE has been replaced with a shiny 2006 version.
The basic concepts of TUPE remain the same. However, the protection of the Regulations has been broadened and detail has been inserted that, in part, reflects the outcome of the plethora of litigation on the subject over the years. The main changes are:
- TUPE now expressly covers most cases where services are contracted out, re-contracted or contracted in (called 'service provision changes')
- for the first time, there is a duty on the transferor employer to provide the transferee employer (before the transfer) with basic details of the transferring employees (called 'employee liability information')
- new provisions clarify the circumstances in which the transferring employees' contracts of employment can be changed
- special provisions have been inserted to make it easier for insolvent businesses to be transferred to new employers.
In principle, new TUPE should make life easier for employers. Only time will tell whether it makes a difference in practice.