CRATUPEAR - Changes from 31st January 2014
The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 (CRATUPEAR) come into force at the end of this month.
This mouthful of an acronym relates to the long-awaited amendments to TUPE (the Transfer of Undertakings Protection of Employment Regulations 2006) which is the law that requires employers who take over a business, or take over certain contracts from another employer, to take on the employees who worked for that previous employer. It is a complex area, but there are some welcome improvements to the regulations for employers. These include:
Service provision changes
It will be clearer that, for TUPE to apply, the activities carried on after service provision changes have happened must be, "fundamentally or essentially the same" as those carried out by the person who has ceased to carry them out..
Employee liability information
The new employer will have more time to consider the liabilities it will be acquiring. The transferring employer will normally have to hand that information to the new employer at least 28 (rather than the current 14) days before the transfer. This will apply to transfers that occur on or after 1st May 2014.
Businesses employing 10 or fewer employees will be able to inform and consult with the employees directly, rather than having to hold elections for employee representatives, where no such representatives exist. This will apply for transfers taking place on or after 31st July 2014.
A new employer will only be bound by collective agreements that were in place at the time of the transfer. They can't be bound by later changes which they weren't involved in negotiating.
In addition, terms agreed in a collective agreement can be renegotiated by the employer - providing the new terms are, overall, no less favourable to the employee and don't take effect until at least one year after the transfer.
Dismissals not necessarily automatically unfair
Dismissals will only be automatically unfair where the transfer was the reason for the dismissal (and not where dismissal was for a reason connected with the transfer), unless an economic, technical or organisational (ETO) reason applies.
There could be more scope for employers to make changes to employees' contracts after a TUPE transfer. At the moment, changes can't be made if the reason for them is the transfer itself or a reason connected with the transfer. Changes for reasons connected with the transfer may now be possible.
A change of location, post-transfer, could be an "economic, technical or organisational reason entailing changes in the workforce". So an employee made redundant because of a business move won't necessarily have a claim for automatically unfair dismissal. And, in certain circumstances, consultation carried out before the TUPE transfer could count towards any overall 30 or 45-day redundancy consultation period.
The Government is going to provide guidance which should help employers get to grips with the new provisions. However, TUPE remains a complex area and it is recommended that employers contemplating changes to which these regulations may apply, should seek expert advice.
Posted on 19 Nov 2016