TUPE: From Protection of Employees, to Promises for Employers

06 March 2013

By Roger Jeary

The Coalition’s proposals for the reform of TUPE Regulations aim to strip back employee protection (the very purpose of the legislation) and give businesses an easy ride when it comes to dismissing workers and cutting pay.

Since the application of the EU Acquired Rights Directive through the Transfer of Undertakings (Protection of Employment) Regulations in 1981, the Regulations have become the most challenged and challenging in UK employment legislation.

UK case law throughout the 1980’s and 90’s created a complexity which in the first decade of this century has been addressed through revision and publication of the revised regulations in 2006.

It is worth reminding ourselves that the purpose of the regulations is to protect employees’ employment rights when the business or undertaking for which they work transfers to a new employer. I say that because in the Coalition consultation published in January this year, the introduction from the Minister makes clear that the government’s purpose in reforming aspects of the regulations is to continue its:

” ..commitment to review employment laws to ensure they provide the flexibility that employers need to grow and compete effectively”.

Not much about protection of employee’s rights and yet these regulations offer the only protection that workers have during the movement of capital assets from one owner to another. It is particularly crucial to those workers who find their services outsourced to another employer, a favourite practice of the public sector at present as the consultation document points out, saying “that number will increase as the Government’s programme to open public services develops and public services are opened to competition”.

Yet it is this very protection introduced in the revised 2006 regulations which is targeted by the proposed Coalition reforms amongst others. The consultation document makes the point vividly that it is really difficult for transferee companies to introduce efficiencies and operate more cheaply than the transferor because the regulations act as a barrier to reducing the size of the workforce or the transferred workers’ pay levels. What a surprise that regulations designed to protect employment should place barriers in the way of employers who want to cut jobs and pay when acquiring a company! This protection is classified as ‘gold plating’ by the Coalition.

Also contained within the consultation is another direct attack on collective agreements, which in the main will be trade union agreements. These agreements frequently influence the individual terms and conditions of employees and the limitation of such agreements to say 12 months following transfer gives the new employer freedom to vary conditions once the period has expired. Not much protection for employees there either!

Finally, I come to dismissal. The whole point of TUPE is to protect workers from dismissal brought about by their transfer of employment designed primarily to benefit the owners of the transferee company. The Coalition government feel that the current wording of the UK Regulations gives wider protection than is absolutely necessary, (heaven forbid that workers in the UK, normally the easiest to sack, should derive some additional benefit through our own legislation), so it proposes to amend the wording to limit the restrictions on dismissing workers at the time of a transfer.

So there you have it. A cursory and brief inspection of these proposals adds to the ‘flexibility’ of UK workers, or, in other words, provides greater opportunity for dismissals and attacks on terms and conditions. You do have to wonder, if these changes go through, if we can continue to describe these Regulations as ‘Protection of Employees’. Perhaps the title should be amended to Transfer of Undertakings (Promises for Employers) Regulations.

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