Brexit: how will it effect TUPE?

This month, we have added two TUPE documents:

1. A template letter from the transferee organisation to the transferor organisation advising them of any changes that they envisage in relation to the transfer; and
2. A template letter to employees transferring across to the transferee organisation advising them that the identity of their employer has changed and of any other changes that may apply (e.g. in respect of pension provision).

Since the EU referendum and the vote to leave the EU, TUPE is one of the areas which commentators believe is a possible candidate for reform. Obviously, nobody knows exactly what the impact of Brexit will be on TUPE or indeed other aspects of employment legislation, but this is a brief look at where there appears to be an appetite for change in relation to TUPE.

TUPE, or to use its full name, The Transfer of Undertakings (Protection of Employment) Regulations 2006, transfers employees’ rights connected to their contracts of employment (including their statutory rights and the employer’s liabilities) when there has been a transfer of undertakings or a service provision change. Essentially, TUPE is legislation designed to protect employee rights. So far, so straightforward. The problem is that TUPE is very complex in application and can cause potentially costly problems for employers particularly as regards the right to dismiss transferring employees, the restrictions on the right of transferee organisations to change contracts and the obligations to engage in collective information and consultation with affected employees.

The other issue with TUPE is recognising when it applies. TUPE may apply, for instance, in circumstances that are not obvious (for example, the loss of a client from one professional services firm to another).

Following the vote to leave the EU, a wholesale repeal of TUPE is unlikely. It is possible, however, that small changes could be made to TUPE to make it more business-friendly. For example, we may see a lessening of the formality around the obligations to inform and consult, perhaps by dispensing with the need for collective consultation or by limiting the obligation to larger businesses. The removal of restrictions on the transferee to harmonise terms and conditions post-transfer, may also be a likely target.

Whatever happens to TUPE or employment law in general, changes will take many months and probably years. Simply-Docs will keep its documents constantly reviewed and updated over this time.