Robyn McIlroy, an employment law specialist with Pinsent Masons, the law firm behind OUT-LAW.COM, said: "The DTI has said that these new Regulations will 'promote certainty' and 'eliminate grey areas' – but that seems less than guaranteed."
She continued: "What is clear, however, is that anyone involved in contracting out of businesses will need to aware of the scope of the new Regulations, particularly the application to service provision changes."
By amending the TUPE Regulations – properly called the Transfer of Undertakings (Protection of Employment) Regulations 1981 – the DTI sets out to improve protection for employees and to help businesses by reducing transaction costs.
In general terms, the changes will:
- 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.
Pinsent Masons is running a series of free workshops on the new TUPE regime in London (3rd March), Leeds (3rd March), Birmingham and Manchester (8th March) and Glasgow (9th March) as part of its HR Network services.
