Insolvency Oracle

Developments in UK insolvency by Michelle Butler

Changes to TUPE: Clear as Mud

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The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2013 are set to come into force on 31 January 2014. The draft Regulations can be accessed at (UPDATE 04/04/2014: On reading R3’s Technical Bulletin 106, I realised that I had not updated this to provide a link to the final regs: BTW R3, as imitation is the sincerest form of flattery, I will take your article 106.6 as a compliment (although I’d still be interested in learning who on GTC was behind it)!)

These Regulations affect the Transfer of Undertakings (Protection of Employment) Regulations 2006 and the Trade Union and Labour Relations (Consolidation) Act 1992 and came about as a result of the Government’s early 2013 consultation. The Government’s response on the close of the consultation can be found at

From what I can see, the changes that may impact insolvency contexts are:

• The wording around unfair dismissals connected with transfers is being changed. The TUPE Regulations 2006 state that an employee is treated as unfairly dismissed “if the sole or principal reason for his dismissal is the transfer itself or a reason connected with the transfer” (where that is not an ETO reason etc.) (Regulation 7(1)). This is to be replaced with: “if the reason for the dismissal is the transfer” (other than ETO reasons). It would seem to me that this cleaner and more specific description may take a lot of the uncertainty out of how Tribunals might view dismissals – we can only hope!

• The definition of ETO reasons “entailing changes in the workforce” will include a change to employees’ place of work.

• Pre-transfer consultation may be carried out either by the transferor or, under these Regulations, by the transferee (with the transferor’s agreement), and this may count as consultation towards subsequent redundancies. However, a transferee will not be able to claim “special circumstances rendering it not reasonably practicable” to consult on the basis that the transferor had failed to provide information or assist the transferee.

• The time period within which a transferee must provide employee liability information to a transferor has been increased from not less than 14 days to not less than 28 days before the transfer.

• Employers of fewer than 10 employees – micro-businesses – no longer need to invite employees to elect representatives to consult on transfers, although if there are already recognised employee representatives, the employer needs to consult with them. If there are no representatives, the employer simply consults directly with the employees.

What has not changed?

Not unsurprisingly given that it is still the subject of an appeal, the Regulations continue to refer to “at one establishment”, although the current position of the Woolworths Tribunals process suggests that this does not implement adequately the EC Directive (

The Government had also sought views on whether a transferor could rely on a transferee’s ETO reason to dismiss an employee prior to a transfer. Although 57% of all those who responded to the consultation supported the concept (and only 26% were opposed), the Government has decided not to take this idea further, pointing out that it hadn’t actually put forward a proposal to change the Regulations, it had merely asked an open question! It felt that such a change could result in an increase in “general unfairness in the labour market” and could be challenged in the courts, as the suggestion had been made that it would be contrary to CJEU judgments and perhaps to the spirit of the Acquired Rights Directive (see Government response, section 11).

Author: insolvencyoracle

In working life, I am a partner of the Compliance Alliance, providing compliance services to insolvency practitioners in the UK. I started blogging as Insolvency Oracle in 2012 after leaving the IPA and on realising that I was now free to express my personal opinions in public.

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