By amending the TUPE Regulations – properly called the Transfer of Undertakings (Protection of Employment) Regulations 1981 – the DTI promises to improve protection for employees and to help businesses by reducing transactions costs.
The new Regulations are due to come into force on 6th April 2006. They were expected to be published on Monday, but the DTI says they're not ready yet. In the meantime it has published its official guidance on the proposals. These clarify some of the changes made by the new Regulations, including proposals to:
- extend TUPE to cover so-called service provision charges – service contracting operations, such as cleaning services – so employers and employees know where they stand from the outset of an ownership transfer. This will not apply to services bought in on a "one-off" basis;
- increase the transparency of the transfer process by requiring the old employer to provide the new employer with details of any employment liabilities – failure to do so can result in compensation being awarded against the old employer;
- give a significant boost to the DTI's promotion of the "rescue culture" by introducing new flexibility into the Regulations' application to the transfer of insolvent businesses;
- clarify the circumstances in which employers and employees can change the terms and conditions of employment for "economic, technical or organisational" reasons; and
- clarify the circumstances under which it is unfair for employers to dismiss employees for reasons connected with a relevant transfer.
The guidance makes no mention of a "professional business services exemption", which had been included in earlier drafts of the Regulations. This would have ensured that TUPE did not apply to service provision changes involving 'white collar' employees.
