New rules seek to simplify matters of staff transfers.
The Government has published the new Transfer of Undertakings (Protection of Employment) Regulations.
These amendments seek to simplify this notoriously complex aspect of employment legislation which aims to protect employees when the company employing them is sold or the service on which the employees work is contracted in or out.
These changes now clarify when TUPE will apply to the contracting out of contracts, such as office cleaners, and the occasions on which employers can justify dismissing employees for reasons relating to the transfer.
The regulations are being widened to include cases where services are outsourced, contracts taken in-house or assigned by a client to a contractor. These "service provision changes", as they are called, apply only when there is an organised grouping of employees whose main job is to carry out the contracted-out activities on behalf of the client. They do not apply, however, if the client buys in the services on a one-off basis and/or for a short time.
Employers can only vary contracts of employment for a reason unrelated to the transfer; or if the principal reason is an economic, technical or organisational reason entailing changes to the workforce; or the transferor is insolvent, and either the transferor or transferee agrees the variations with a trade union or elected employee representatives.
There is a new duty on transferors to supply information about the transferring of employees to the transferee by providing what is called "employee liability information". This includes:
* Information about the identity and age of the employees;
* Information contained in their statement of terms and conditions of employment;
* Information relating to any collective agreements applying to those employees;
* Any disciplinary proceedings or grievances issued in the last two years where the statutory dispute resolution procedures apply;
* Any court or tribunal cases brought by the employees in the last two years.
The transferor and the transferee both have a duty to inform and consult representatives of employees who may be affected by the transfer. The employer must tell them when the transfer is going to happen and the implications of it.
There are special provisions being introduced making it easier for insolvent businesses to be transferred to new employers. For instance, transferees will no longer be liable for redundancy payments to employees of insolvent companies and the transferee has more scope to vary terms and conditions after the transfer.
Sally Lomas Fletcher is a solicitor at Samuel Phillips Law Firm in Newcastle.