Government opens consultation on TUPE reforms shortly before announcing general election
Shortly prior to announcing the general election, the government opened consultation on proposals to reform TUPE and abolish European Works Councils.
TUPE
The TUPE Regulations protect employees' rights when their employment transfers to a new employer, or when there is a change in the provider of a service. When TUPE applies, an employee's employment and associated rights automatically transfer to the new employer.
Currently, there is some uncertainty as to whether TUPE Regulations apply to both 'employees' and 'workers'. The consultation proposes to amend the definition of 'employee' in the Regulations to confirm that TUPE applies to employees only.
The consultation also proposes removing the obligation to split employment contracts between multiple employers where a business is transferred to more than one new business. This is an obligation established by European case law. The government's view is that splitting contracts is impractical for employees and employers alike. It thinks that the employers taking over the business or service should agree between themselves who should be responsible for each employee's contract.
Abolishing legal framework for European Works Councils
European Works Councils (EWCs) are consultative bodies that represent the European workforce of multi-national organisations. Following the UK's departure from the EU, it was legislated that establishment of new EWCs would be prevented in the UK. Pre-existing EWCs were to be maintained for a period of time, but not indefinitely. The new proposal is to remove the legal framework for EWCs in the UK, which will include a repeal of the current requirement to maintain existing EWCs.
How will the general election impact on this consultation?
Since this consultation was opened, the government announced a general election on 4 July. The consultation will close after the general election, on 11 July 2024. The result of the election is likely to inform the government's policy on TUPE and other employment-related matters going forward.
Employers should note that irrespective of the general election, TUPE consultation requirements for small businesses will be simplified in July. The consultation document states these changes came into force on 1 January 2024. In fact, whilst the regulations introducing this change came into force on 1 January, the relaxed consultation requirements apply to TUPE transfers taking place on or after 1 July 2024.