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.
What is TUPE?
TUPE outlines what should happen to employees and their contracts of employment when a business (or part of a business) is sold. It also outlines what should happen to employees when a service is outsourced or if a previously outsourced service is brought back in-house.
TUPE is based on European legislation. In the last few years, several cases have taken TUPE in a direction which the British Government feels doesn’t necessarily work for UK businesses. With the regulatory freedom achieved through Brexit, the following changes have been proposed to clarify TUPE.
Proposed changes:
1. TUPE should apply to just employees, not to workers
The current version of TUPE uses a European definition of ‘employee’ that’s broader than the one used in UK employment legislation, such as the Employment Rights Act 1996.
The 2019 tribunal case of Dewhurst v Revisecatch Ltd raised the issue that TUPE would catch workers in addition to employees. The Government now wants to clarify the position.
2. Amend TUPE regulations to clarify that an employment contract should only be transferred to one employer and should not be split between multiple employers
If a business is transferred to multiple buyers, full employment of each employee must transfer to just one of those buyers (aka the transferee).
Previously the European Court of Justice had held (in ISS Facility Services NV v Govaerts) that the business that took on most of the transferring service would get all the assigned employees (Kimberley Housing Group v Hambly).
The Government’s proposal is that, going forward, the buyers /transferees will be required to agree who should take on each employee.
Have your say
If your business undertakes TUPE transfers regularly, then you can let the Government know what you think about these proposals here.
Useful links
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