The
Government today announced plans to take forward reform of TUPE, the
legislation that protects employee rights when the business they work for is
transferred to a new owner. The aim will be to improve the operation of the
legislation for both employees and employers.
The
reforms will amongst other things:
•
apply TUPE more comprehensively to service contracting operations involving
labour-intensive services such as office cleaning, catering, security guarding
and refuse collection (while leaving unaffected the position in relation to
‘professional services’ such as accountancy, consultancy and legal advice);
•
ensure that the new employer is better informed of the ongoing employment
rights of the employees he or she takes on; and
•
improve the way TUPE operates when insolvent businesses are sold, to help
promote the ‘rescue culture’ and save businesses and jobs that would otherwise
be lost.
The
Trade and Industry Secretary, Patricia Hewitt, said: "The Government’s
decision to proceed with reform of this legislation will support business
flexibility and restructuring and help ‘take the fear out of transfer’ for
those affected. Many employees, including those in low-paid service sector
jobs, will now be assured of benefiting from the security that TUPE provides.
"I
will be carrying out public consultation on draft revised regulations in the
first half of this year, with a view to placing them before Parliament in the
autumn, to come into effect in spring 2004."
John
McMullen, national head of employment law at Pinsent Curtis Biddle and
Professor of Labour Law at the University of Leeds said: "Many public
sector workers have already been promised better protection on TUPE transfers
through the Government’s ‘Statement of Practice on Staff Transfers in the Public
Sector’ and in the draft code of practice on workforce matters in local
government.
"It
remains to be seen whether this protection will be afforded to all workers,
including those in the private sector. The comment made by the minister about
support for business flexibility and restructuring is perhaps the most
intriguing statement. There is nothing in the directive which the new TUPE
regulations will implement [the Acquired Rights Directive 98/50/EC] that would
allow considerable relaxation of the rules preventing employers from
restructuring and renegotiating employment terms.
"What
the Government proposes here will be keenly watched by companies and employees,
the former wanting more flexibility and the latter seeking to preserve the
security currently afforded by European Law."
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