As is well known, the principal role of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) is to protect the rights of employees when an organisation, a part of it, transfers from one employer to another, or there is an outsourcing or the change in the provider of a service. This protection results in, amongst other things:
- A duty for the transferor employer to inform or consult the representatives of affected employees;
- Restrictions on a transferee employer’s right to vary the terms of transferred employees; and
- Additional protections from unfair dismissal for transferred employees with more than two years’ continuous employment.
What is the current position and what changes are expected?
As a result of the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (SI 2023/1426), the duty to inform or consult affected employees under TUPE will be altered from 1 July 2024.
At present, employers must inform and consult with employee representatives. When there are none in place, they must be specifically elected for this purpose. Employers may only consult directly with individual employees about a transfer where there are fewer than 10 employees working for the organisation in total and the affected employees have not been invited to elect representatives.
For transfers on or after 1 July 2024, in organisations where there are no employee representatives, specifically electing them for the purposes of a TUPE transfer will no longer be a requirement where:
- The organisation employs less than 50 employees; or
- The transfer involves less than 10 employees (regardless of the total size of the organisation).
After 1 July 2024, employers meeting the above criteria will therefore have greater flexibility to consult directly with employees affected by a TUPE transfer. However, they may continue to engage with employee representatives in those circumstances if they wish.
Key take away for Employers
Employers (especially small-to-medium enterprise employers) should welcome this change, which should serve to reduce the administrative complexity of smaller-scale TUPE transfers.
Nonetheless, it should be noted that the requirements for TUPE transfers which do not meet these criteria remain unchanged.