Despite the gloomy time of year, there are at least three reasons to be cheerful today: 'Blue Monday' (20 January) is out of the way, January is very nearly over, and Bevan Brittan's first News Round-Up of 2014 is here. And, as if that is not enough, this is a special 'New Year New TUPE' edition, in which Sarah Lamont looks at what the 2014 TUPE regulations will mean for you, alongside other recent developments in the world of employment law.
New TUPE and BIS guidance
After what seems to many like a long wait, the regulations which set out how 'new' TUPE transfers will operate have finally been published: the Collective Redundancies and Transfer of Undertakings (Protection of Employment)(Amendment) Regulations 2014 ('the Regulations'). The Regulations supplement, but do not replace, the 2006 TUPE Regulations and, in respect of collective consultation, they also effect changes to the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A).
BIS has also updated its TUPE guidance to take account of the Regulations – please click here for a copy.
What are the key aspects of the new legislation?
- Contrary to an initial proposal to repeal the rules on service provision changes (SPC), these will remain in place, but an SPC will be defined as occurring where the activities carried on after the change in service provision are "fundamentally or essentially the same" as those carried on pre-transfer.
- Reflecting the decision in Parkwood Leisure v Alemo-Herron (please click here for our summary) there will be a 'static' approach to the transfer of terms derived from collective agreements. In other words, terms governed by collective agreements will be 'fixed' at the point of transfer, and will not be affected by subsequent negotiations between the original parties to the collective agreement, from which the incoming contractor is excluded. In addition, transferees will be able to change terms derived from collective agreements one year after the transfer, provided that the overall change is no less favourable to the employee. The new guidance does not give any indication of what is meant by 'no less favourable'.
- Contractual variations will be allowed post-transfer if there is a pre-existing contractual right of variation. This change is expected to have limited effect, because UK legislation is curtailed by European law which prevents contractual changes unless there is an economic, technical or organisational reason entailing changes in the workforce (an "ETO reason"). The new guidance also explicitly states that the Regulations do not allow for harmonisation. As is currently the case, contractual variations will be allowed post-transfer if there is an 'ETO reason' but the wording has been amended so that changes will only be prevented if "the sole or principal reason" for the variation is the transfer (currently, changes 'connected' to the transfer are also excluded). This change is likely to give employers more flexibility to effect changes that are indirectly linked to a transfer.
- Changes in the location of the workforce following a transfer will be expressly brought within the scope of an "ETO reason", thereby preventing genuine place of work redundancies from being automatically unfair. Many employers will welcome this change, particularly as re-tendering and outsourcing arrangements often involve a change of location.
- Despite suggestions in the consultation on the new Regualtions, the legislation will not enable transferors to 'borrow' a transferee's ETO reason in order to justify dismissing an employee prior to a transfer. Although this may have the practical effect of perpetuating the somewhat artificial process of having to complete a TUPE transfer before effecting any dismissals, the government felt that allowing pre-transfer dismissals would risk unfairness to employees (for example, contractors dismissing employees to make their contract look more financially viable to bidders).
- Collective consultation which begins before the transfer will count for the purposes of complying with the collective redundancy rules, provided that the transferor and transferee agree and the transferee has carried out meaningful consultation. Although this should have practical benefits, there are risks on both sides: for the transferor, there may be risks around access to its employees pre-transfer; for the transferee there may be risks around obtaining adequate information from the transferor.
- The requirement to provide employee liability information will be retained, but will have to be given 28 days before the transfer, rather than the current 14 days.
- 'Micro-businesses' (i.e. businesses with fewer than 10 employees) will be allowed to inform and consult affected employees directly when there is no recognised independent union, nor any existing appropriate representatives.
- Employees will continue to have the right to resign and claim that they have been dismissed where there is a substantial change in working conditions to their material detriment.
Apart from the provisions relating to the employee liability information (which come into force on 1 May 2014) and 'micro businesses' (which come into force on 1 July 2014), the Regulations are in force on 31 January 2014.
'Woolworths' case & redundancy consultation
Last Wednesday, the Court of Appeal heard an appeal against the Employment Appeal Tribunal's decision in USDAW v Ethel Austin and another - commonly known as the 'Woolworths' case - on the meaning of 'establishment' for the purposes of collective consultation. The case has now been adjourned, while the Court of Appeal refers it to the Court of Justice of the European Union. Please click here for more information about the Employment Appeal Tribunal case and its practical implications.
Statutory payment increases
Usually, 1 February sees an annual increase in the statutory rates for calculating redundancy pay, guarantee payments and tribunal awards. From this year onwards there will be no February increase but the rates will change on 6 April each year, in keeping with other statutory rate increases such as Statutory Sick Pay and Statutory Maternity Pay. New rates will be announced shortly.
New Acas guidance
Ahead of the repeal of the discrimination questionnaire procedure, which is currently timetabled for April 2014, Acas has published new guidance on asking and responding to questions of discrimination in the workplace. The new guidance can be downloaded here. The guidance is non-statutory, so there are no penalties for any failure to follow it, but it is likely to be adopted by claimants in lieu of the formal questionnaire procedure.
Fees – first 'official' statistics published
Following on from the publication of their provisional tribunal statistics published last year, the Ministry of Justice has now confirmed its official statistics for the quarter July to September 2013. These statistics are of particular interest as they represent the first set of official statistics since the introduction of employment tribunal fees on 29 July 2013. In summary, claims are down 17% on the same period in 2012, and unfair dismissal and failure to inform or consult on redundancy claims have fallen by around 40%. We understand that, since the end of last year, claims have been increasing, following a sharp dip after the introduction of fees, but the Employment Tribunal Service expects claims to stabilise this Summer. However, official figures on these points are not yet available.
Agency Worker Regulations and long term 'temps'
In what may be a refreshingly logically – but also perhaps surprising – decision of the Employment Appeal Tribunal (EAT), it has been held that the Agency Workers Regulations do not apply to agency workers on long-term assignments. In the case of Moran and others v Ideal Cleaning Services Ltd a group of agency staff were assigned indefinitely to one hirer and worked for that hirer for periods ranging between six and twenty five years. The EAT found that an employment tribunal was correct to say that the Agency Worker Regulations did not apply to these employees. The regulations define "agency worker" as "an individual who is supplied by a temporary [our emphasis] work agency to work temporarily for and under the supervision and direction of a hirer". "Temporary", the EAT said, in this context means not permanent. And for employment purposes, a permanent contract is generally regarded as one which is open-ended in duration, terminable on proper notice being given. The arrangements under which the agency staff worked were indefinite; therefore they were excluded from the scope of the regulations. This means that they would not be entitled to the benefits which must be provided to workers under the regulations, such as access to a hirer's collective facilities, information about the hirer's job vacancies and (after their first 12 weeks' engagement) entitlement to the same "basic working and employment conditions" as direct recruits.