TUPE changes could lead to a step back in time

I’m Peter Webster, chief executive of Corps Security, and this is where I examine the issues affecting the security industry. My thoughts and opinions are intended to generate debate and whether you agree or disagree with them, you’re welcome to post your comments below.

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I doubt that I am alone in my intense dislike of excessive red tape and the unnecessary burden it places on businesses and individuals. However, one of the most important things that I have learned over the years is that not everything that adds an additional layer of bureaucracy to our day-to-day activities should be viewed in a negative way.

I’m afraid that when it comes to the proposed changes to The Transfer of Undertakings (Protection of Employment) Regulations (TUPE), it could well be that rather than making life easier, things could once again be a whole lot more complicated.

As part of its goal to make employment laws more flexible and less onerous on employers, the coalition government has taken the view that the service provision change (SPC) element of TUPE is unnecessary and plans to abolish it. A consultation on this proposal has recently been completed and if it goes ahead the process of repealing the provisions could start as soon as October 2013, although it is anticipated that a potentially significant lead-in period may be required before any changes take full effect.

Unfortunately, what those who are in favour of this move are forgetting is that SPC was introduced as part of 2006 TUPE amendments to clarify when the Transfers of Undertakings Directive 2001/23/EC applies. TUPE clearly states that employees of the previous service provider or owner automatically transfer to the new employer and must be given the same terms and conditions. It applies to companies regardless of their size and despite some anomalies it has, on the whole, succeeded in providing clarity on outsourcing, insourcing and transfer of service contracts.

Prior to the 2006 amendments there were endless disputes and persistent uncertainty about whether, in various different circumstances, TUPE 1981 applied when an organisation changed its contracted out functions. This resulted in a never-ending stream of litigation that involved trying to ascertain the relevance of TUPE in such circumstances. Cases involving the same facts could have different interpretations of the law depending upon which Tribunal heard the case.  In my view, repealing SPC rules will take us back to the 1981 position, leaving scope for uncertainty and costly legal bills once again.

The implications of this move are serious and far-reaching for all in the security sector. If TUPE doesn’t apply then affected employees risk losing their employment and all accrued service rights. As for employers, they have the burden of being encumbered with a substantial redundancy liability for which it is unlikely that they will have made financial provision for. It is not an exaggeration to suggest that the only group to benefit from this will be the lawyers and far from introducing increased competitiveness and flexibility, these retrograde proposals will have the reverse effect.

The proposals don’t begin and end with the SPC part of TUPE though. The other key reform proposal is to do away with the requirement that outgoing contractors (transferors) provide minimum information about the employees being transferred. The requirement for employee liability information to be disclosed at least 14 days before a transfer is expected to be repealed and replaced with an obligation that the parties disclose information necessary for the parties to comply with their duties under TUPE, leaving the parties to resolve disclosure of information between them.

Again, this could have serious repercussions. Pre-2006 TUPE meant that contractors took over contracts without knowing who was assigned to the contract and on what terms and conditions. The revised regulations brought in a minimum standard of information, which has proved beneficial to all parties. Removal of the legal obligation to provide such information will take us back to the bad old days when no, or inaccurate information, proved to be the norm.

While I am firmly against anything that creates an uncertain operating environment there is, however, one positive proposal with regards to changes to terms and conditions of employment. As it stands, any changes connected with a transfer are void and unenforceable, even if the transferor and transferring employee agree to a change. The exception to this is if the reason for the change is an economic, technical or organisational reason entailing changes in the workforce. In many cases, this causes unnecessary problems, and amendments to the restriction on changing terms and conditions post-transfer will be broadly welcomed.

If the government’s proposals go ahead the security industry could be in for a very rough ride. While I would not argue for one moment that the 2006 amendments to TUPE have created a perfect situation, I think that it was a step in the right direction and provided a good platform on which to build. Unfortunately, rather than building on them, getting rid of SPC and altering the employee liability information process knocks everything down and will do far more harm than good. What do you think?

3 thoughts on “TUPE changes could lead to a step back in time

  1. Pingback: Why a root and branch overhaul of procurement policy is a must | Corps Thinking

  2. Pingback: The case in favour of zero hours contracts | Corps Thinking

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