The Government has launched a consultation on plans to change some provisions of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”).
The consultation, which runs until 11 July 2024, is part of the Government’s efforts to reduce the regulatory burden on businesses, as set out in its policy paper “Smarter regulation to grow the economy”, which was published in May 2023.
The consultation seeks views on the following proposals:
- reaffirming that only employees are protected by TUPE;
- removing the complex obligation to split employees’ contracts between multiple employers where a business is transferred to more than one new business; and
- abolishing the legal framework for European Works Councils.
TUPE protects employment rights when a business (or undertaking) for which an individual works transfers to a new employer, and when a service transfers to a new provider.
The consultation proposes to amend TUPE to reaffirm the widely accepted principle that TUPE applies only to “employees” but not “workers”. This principle was called into question in 2019 in the case of Dewhurst v Revisecatch Ltd t/a Ecourier, when an employment tribunal found that “workers” as well as “employees” qualified for this TUPE protection. Although the decision is not a binding one, the Government proposes to amend the definition of “employee” in the TUPE Regulations in order to clarify the position.
The consultation also proposes removal of the obligation to split employees’ contracts of employment between multiple employers where a business is transferred to more than one new business. This obligation was established by the European Court of Justice (ECJ) in the case of ISS Facility Services NV v Govaerts, where a cleaning contract was divided between two different companies and the ECJ ruled that the split should be in proportion to the tasks performed for each company. Given the impracticality of doing so, which would likely include dividing employees’ terms and conditions respectively and require employees to work between multiple premises, the Government proposes amending TUPE to clarify that a contract of employment should only be transferred to one employer. The consultation therefore suggests that the contract of employment cannot be split between multiple employers, and the employers taking over the business or service would be required to agree who should be responsible for each employee’s contract.
Furthermore, the consultation proposes abolition of the legal framework for European Works Councils in the UK. Works Councils are consultative bodies representing the European workforce in multinational organisations. Whilst the Government legislated to prevent any new Works Councils being formed post-Brexit, the Government now proposes to allow those already in existence to be disbanded.
Aside from these proposed changes, application of TUPE can be particularly tricky to navigate.
If you require any advice regarding this or any other employment law issues, the employment specialists here at Glaisyers are on hand to provide assistance. Get in touch at employment@glaisyers.com.
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