The Government has launched a consultation on plans to change the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The consultation runs until 11 July 2024 and can be accessed here.
TUPE sets out what happens to employees and their contracts of employment when a business (or part of a business) is sold. It also sets out what happens to employees when a service is outsourced or where a previously outsourced service is brought back in-house. TUPE is based on European legislation and, in the last few years, several cases have taken TUPE in a direction which, the Government feels, does not necessarily work for UK businesses. With the regulatory freedom achieved through Brexit, the Government proposes to make the following changes to TUPE:
- To clarify that TUPE should only apply to employees not to workers. In its present form, TUPE is stated to apply to ‘employees’ but its definition of ‘employee’ is looser than that contained in Employment Rights Act 1996 and other UK employment legislation. This led to the 2019 tribunal case of Dewhurst v Revisecatch Ltd which held that TUPE would also catch workers. Although this decision, being one at first instance, is not binding on future cases, the Government proposes to clarify the position.
- To confirm that if a business transfers to multiple buyers, the assigned employees cannot have their employment split between them (as the European Court of Justice had held in ISS Facility Services NV v Govaerts). Full employment of a given employee must transfer to one transferee. The Government’s proposal is that, going forward, transferees would be required to agree who should take on each employee. This proposal marks a change from the UK’s pre-Govaerts position. Before, the transferee who took on most of the transferring service would get all the assigned employees (Kimberley Housing Group v Hambly). It is unclear how this part of the proposal would work in practice.
If your business undertakes TUPE transfers regularly, then you can let the Government know what you think about these proposals here.
Find out how we can help. Our partner, Jon Dunkley, heads the Wollens specialist Employment Department. Contact him today for an informal chat, without obligation on 01271 342268 or via email at [email protected].
