Employment Law Update: TUPE and consultation changes for transfers with effect from 1 July 2024

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When businesses transfer or merge, or activities are outsourced, TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006), will be triggered.

These well-established regulations impose on the parties a duty to inform or consult, as well as requiring that the transferring party provides prescribed information to the acquiring party (known as Employee Liability Information). Additionally, these regulations grant various forms of employment protection for those transferring, including restrictions on the freedom to vary employment contracts and, for employees with two or more years of continuous employment, extra unfair dismissal protection.

For TUPE transfers taking place on or after 1 July 2024, the duty to inform or consult changes.

Transfers prior to this involve a duty to inform or consult with existing employee representatives where these are in place. Where there are no such representatives, the requirement is that:

  • Employee representatives are specifically elected for this purpose, with the election conducted in line with the rules set out in TUPE; or
  • Consultation may take place with the affected employees individually, but only if:
    • The employer employs fewer than 10 employees in total; and
    • The affected employees have not been invited to elect employee representatives.

For TUPE transfers taking place from 1 July 2024, the regime changes to increase the circumstances where it is possible to inform or consult with employees directly. Provided there are no employee representatives already in place, and provided none of the affected employees have already been invited to elect employee representatives, the dialogue may take place with the affected individuals directly in either of the following situations:

  • The employer has fewer than 50 employees in total; or
  • The transfer involves fewer than 10 employees regardless of the employer’s size.

In all other cases, the duty to elect employee representatives will continue to apply.

At first glance, this change sounds appealing, after all it dispenses with the need to elect employee representatives in many more cases. Conducting dialogue directly with the individual employees affected by a TUPE transfer will certainly be attractive where there are only a small number of employees involved and this option now becomes available to larger employers.

However, as the number of employees involved in the transfer increases, those managing the TUPE process will need to consider carefully whether individual consultation is in truth attractive.  Sometimes, it can be easier talking to, and seeking to reach agreement with a team of employee representatives, rather than having to meet and engage in dialogue with each individual, addressing each person’s own personal points and conducting the same conversations multiple times in an effort to reach agreement with all.

Beyond this, the main principles that apply to the duty to inform or consult are unchanged.  Consultation should be with a view to seeking agreement, albeit ultimately agreement may not prove possible. Failure to meet the duty continues to involve a potential protective award of up to 13 weeks’ gross pay per affected employee. Other liabilities could also arise. For example, failure to adopt the correct TUPE process could undermine the fairness of subsequent steps taken, such as future relocations or redundancy dismissals.

For further information about the content of this post, or to seek advice about other employment law matters, please contact our Employment Law team, who have the knowledge and experience to advise you.

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Employment Law Update: TUPE and consultation changes for transfers with effect from 1 July 2024

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