Changes to the TUPE regulations for micro businesses

Year Published: 2014

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) were designed to place specific obligations on businesses involved in business sale transactions and service provision changes in order to protect the rights of employees affected by those transactions.

In 2013 the Government decided that changes need to be made to the TUPE regulations in order to increase flexibility and fairness in the labour market.

Many of these changes came into force on 31 January 2014. These included:

  • Clarity that for there to be a service provision change under TUPE, it must be “fundamentally or essentially the same” as before the transfer;
  • The location of a workforce is now within the scope of an economic, technical or organisational reason entailing changes in the workforce, preventing place of work redundancies from being automatically unfair.

Further Changes

From 31 July 2014, a further amendment will come into force which is aimed at micro businesses only (those with fewer than 10 employees).

At the moment, the TUPE regulations require outgoing and incoming employers to inform and consult with ‘elected representatives of the affected workforce’ before the transfer takes place. The point of this exercise is to provide certain information to elected representatives about the transfer and its effect on employees. If there is no recognised trade union or other representatives, they are required to arrange for an election of employee representatives.

How does this affect your business?

From 31st July, these micro businesses will no longer need to invite the election of representatives for consultation purposes and they will instead be allowed to consult directly with each employee about the transfer (or consult with a recognised union or employee representatives if there are any).

This change will better reflect what is actually the current practice in most of these micro businesses. In the majority of cases the employer goes through the motion of offering employees the opportunity to elect representatives because the law says they have to, when in fact most employees in a smaller workforce opt to be consulted with on a one-to-one basis in any event.

For more information on TUPE regulations or any other employment matters, please contact our Employment team on 0161 475 7676.

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