As part of our summer 2024 employment trends series, we recap the recent and proposed changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).
Recent amendments to TUPE aim to ease business regulatory burdens, affecting the transfer process and those impacted by it. For transfers taking place on or after 1 July 2024, employers no longer need to consult with elected employee representatives on behalf of affected employees if the business has fewer than 50 employees or in instances where fewer than 10 employees are being transferred. In these circumstances, employers will be able to consult directly with employees if there are no existing representative or recognised unions in place.
Contract splitting
More recently, the Department for Business and Trade published a consultation seeking views on proposals to clarify that TUPE only applies to employees (not workers) and to prevent complex contract “splitting” where a business is transferring to multiple transferees. In 2020, the European Court of Justice found that employees’ contracts may be split between multiple employers where a business is transferring to more than one transferee. This has impractical consequences, with employees being required to work for multiple employers, and challenges over dividing their terms and conditions. The previous government proposed amending TUPE to clarify that an employment contract may only transfer to one employee. The transferees would be required to agree who should be responsible for each employee’s contract.
Thankfully contract splitting does not come up often in practice and therefore a change to the law would have little effect for most employers. We do not yet know if the new government will take forward these proposals but the Plan to Make Work Pay did state that Labour would “strengthen the existing set of rights and protections for workers subject to TUPE processes”.
