The Department of Trade and Industry (DTI) has published
guidance on forthcoming legislation that will change the TUPE
Regulations, the rules that govern employees' rights when the
business they work for is transferred to a new owner.
By amending the TUPE Regulations – properly called the Transfer
of Undertakings (Protection of Employment) Regulations 1981 – the
DTI promises to improve protection for employees and to help
businesses by reducing transactions costs.
The new Regulations are due to come into force on 6th April
2006. They were expected to be published on Monday, but the DTI
says they're not ready yet. In the meantime it has published its
official guidance on the proposals. These clarify some of the
changes made by the new Regulations, including proposals to:
- extend TUPE to cover so-called service provision charges –
service contracting operations, such as cleaning services – so
employers and employees know where they stand from the outset of an
ownership transfer. This will not apply to services bought in on a
"one-off" basis;
- increase the transparency of the transfer process by requiring
the old employer to provide the new employer with details of any
employment liabilities – failure to do so can result in
compensation being awarded against the old employer;
- give a significant boost to the DTI's promotion of the "rescue
culture" by introducing new flexibility into the Regulations'
application to the transfer of insolvent businesses;
- clarify the circumstances in which employers and employees can
change the terms and conditions of employment for "economic,
technical or organisational" reasons; and
- clarify the circumstances under which it is unfair for
employers to dismiss employees for reasons connected with a
relevant transfer.
The guidance makes no mention of a "professional business
services exemption", which had been included in earlier drafts of
the Regulations. This would have ensured that TUPE did not apply to service provision changes
involving 'white collar' employees.
