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TUPE sets out the fundamental rights and protections granted to employees when the business or undertaking for which they work transfers to a new employer (such as on outsourcing).
The Government carried out a consultation process on possible reforms to TUPE following concerns that that they were overly bureaucratic and created a number of practical difficulties.
Initially a dramatic overhaul of TUPE was proposed, with the "service provision change" provisions (which apply on outsourcing and other projects) being repealed. However, the actual changes were considerably less drastic than anticipated.
The actual changes include:
- It has been clarified that TUPE does apply where the activities done before and after the transfer are "fundamentally the same". This prevents arguments by contractors that TUPE does not apply because they are going to be doing things in a different way.
- Dismissals of transferring employees because of a change of location of their workforce post-transfer are no longer automatically unfair. This will help deal with difficult cases where the new contractor's premises are a long way away from where the current contractor operates.
- Any collective agreement which is agreed after the date of transfer and without the transferee's involvement does not bind the transferee. This change came into effect on 31 January 2014.
- Incoming employers will be able to renegotiate terms and conditions agreed in a collective agreement one year after the transfer, as long as the overall change is no less favourable to the employees involved. This change, which came into effect on 31 January 2014, provides new contractors with more flexibility.
- The deadline for the transferor providing employee liability information to the transferee has increased from 14 days to 28 days before the relevant transfer. This change comes into effect for transfers taking place on or after 1 May 2014. It allows more time for the transferee to prepare their systems for a smooth transition, but (as now) most outsourcing contracts will provide for the outgoing contractor to provide information about potentially transferring employees much earlier on in the bidding process.
Many of these changes, including the removal of some of the existing TUPE uncertainties (like dismissals as a result of a change of location of the workforce being automatically unfair), will provide more flexibility in the outsourcing process.