The use of large up-front fees and disproportionate deposits has already resulted in significant cost consequences for one care provider.
The results of the consultation are as follows:
The Government will not now be removing the definition of service provision changes from within the scope of a TUPE transfer. Service provision changes will therefore continue to be caught by TUPE where the current conditions are met. The Government has agreed to review the guidance it provides to seek to make it as simple as possible to determine whther TUPE applies.
The Government intends to codify case law in defining a service provision change under TUPE as only happening where the activities carried on after the transfer are “fundamentally or essentially the same” as the activities carried out before the transfer.
The deadline for providing employee liability information will change from 14 days before the transfer to 28 days before. Regulations 11 and 12 otherwise remain unchanged.
The Government will amend the current restriction on changing terms and conditions post transfer to reflect the wording of the EU Directive more closely. However, the exact wording has not been published. The Government anticipates that the wording is “likely to refer to the “transfer itself” being the “reason” for the variation” (rather than also a reason connected to the transfer). This won’t give employers who want to change terms and conditions much comfort as the Government’s response states that the new test might also make post transfer changes void where they “might be considered ‘connected with’ the transfer”. The Government will also amend the protection against dismissal regulation (regulation 7) to be in line with this wording.
The Government will limit the obligation to comply with collectively agreed terms and conditions to one year post transfer provided that any changes because of the transfer itself are “no less favourable overall”.
The Government will not amend the regulations in respect of “a substantial change in working conditions to the material detriment of an employee”. The position will remain that where a substantial change takes place the employee can be considered as having been dismissed and this is likely to be automatically unfair.
The meaning of “entailing changes in the workforce” will be amended so that changes in location of the workforce can be within the scope of ETO reasons. This means that a dismissal following TUPE due to a change of location would not be automatically unfair, but will still be subject to the usual unfair dismissal rules.
The regulations will not be amended to allow dismissals by the transferor in reliance on the transferee’s ETO reason before the transfer takes place.
The Trade Union and Labour Relations (Consolidation) Act 1992 will be amended so that pre-transfer consultation will count towards collective redundancy consultation, reducing the burden on business. This is subject to the proviso that the transferee has carried out “meaningful consultation” and the transferor and transferee are able to reach agreement.
The Government will issue guidance on “what a ‘reasonable time’ is for the election of employee representatives” rather than amending the regulations- it was considered too difficult to provide a clear definition that would take account of all possible circumstances.
Micro-businesses will be able to inform and consult employees directly regarding transfers, rather than through representatives “where there is no recognised independent union or existing employee representatives”. Micro-businesses will not be exempt from any of the TUPE changes.
It is important to note that the amended regulations are not expected to be published until December 2013 so we are waiting for the final wording. We will be preparing a detailed briefing explaining the changes and the implications once the amended regulations are published.
For more information
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