The government plans to clarify who TUPE applies to and ensure that employees can only be transferred to one new employer in situations where there are multiple parties involved in an acquisition.
The Department for Business and Trade has published a consultation that seeks views on plans to clarify that the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) will only apply to employees, not workers, after a 2019 employment tribunal judgment introduced uncertainty around who it covers.
The case, Dewhurst v Revisecatch Ltd t/a Ecourier, concluded that TUPE applies to ‘limb (b) workers’ as well as employees. Although the judgment was not legally binding, the Department for Business and Trade said it had created uncertainty for organisations.
TUPE changes
Retained EU Law reforms: How will TUPE change?
The document published alongside the consultation also notes that the definition of ’employee’ in the TUPE regulations differs slightly from the definition in the Employment Rights Act 1996.
It says: “Amending the definition of ‘employee’ in the TUPE regulations will address the ambiguity around the question of whether limb (b) workers are covered by the TUPE regulations. This will provide helpful clarity for businesses undertaking TUPE transfers where workers are involved.”
The consultation also proposes to amend the TUPE regulations to clarify that an employment contract should only be transferred to one employer and should not be split between multiple organisations, with the employers taking over a business or service required to agree on who is responsible for each employee’s contract.
A 2020 European Court of Justice case, ISS Facility Services NV v Govaerts and Atalian NV, ruled that a full-time employment contract can be split between multiple employers when a TUPE transfer involves multiple ‘transferees’. Prior to this case, it was widely understood that an employment contract could not be split as part of a TUPE transfer.
The consultation suggests that splitting contracts in this way can be impractical for employers and employees, as it may require them to work between multiple sites. Dividing employees’ terms and conditions between multiple parties could also be challenging, it said.
It says that some respondents to the government’s May 2023 consultation on reforms to retained EU employment law called for clarity on how similar TUPE cases should be handled following the European court’s judgment.
The consultation also asks about plans to scrap the legal framework for European Works Councils (EWCs) – consultative bodies that represent the European workforce of multinational organisations.
Following Brexit, the UK government introduced a law that prevented the establishment of any new EWCs in the UK, but existing EWCs were allowed to continue to operate. Now, it wishes to repeal the legal framework that allows them to function.
The consultation says: “Since the UK’s departure from the EU, there has been a series of legal cases brought by companies who have sought to disband their legacy EWCs in the UK. While the courts have upheld the position that EWCs that existed prior to EU exit should continue to operate, there is an ongoing cost to businesses of having to operate an EWC in the UK in addition to a parallel one in the EU to meet their obligations under EU law.
“We believe that existing structures can effectively represent workers at company level in the absence of an EWC, such as unions or other employee representatives.”
The consultation runs until 11 July.
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Separate TUPE reforms that remove the requirement to hold elections for employee representatives for TUPE consultations for small businesses and for transfers of fewer than 10 employees will take effect from 1 July 2024.
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