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Revised TUPE legislation comes into force

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Amended Transfer of undertakings (TUPE) legislation comes into force today.

The changes follow a government consultation held in 2013 and are intended to make it easier for companies to manage the transfer of staff after mergers and acquisitions.

Among the changes are rules that allow businesses to renegotiate terms and conditions provided for in collective agreements one year after the transfer, provided that overall the change is no less favourable. 

Where places of work may change after a transfer, any redundancies due to that change will not be automatically unfair in order to stop businesses facing possible unfair dismissal claims simply because of a change in location of the workplace.

Baker & McKenzie head of employment practice John Evason said employers would welcome the reforms. “They are not as extensive as some may have wished but the Government has gone as far as it can without breaching EU law,” he said.

"The reforms give employers greater flexibility to re-shape a business post-acquisition with less scope for legal challenge from the newly acquired workforce on key issues, including place of work redundancies.

“Employers will also welcome the increased certainty around certain practices, such as consulting with staff on collective redundancies pre-transfer, that have long been commonplace upon the sale of a business, but which have so far remained legally untested. The reforms to TUPE should be a boost to the UK as it seeks to achieve its economic growth targets."

He predicted to see more mergers and acquisitions as a result of the reforms giving employers scope to re-shape their business post acquisition.

But DLA Piper employment partner Sue Fanning was less positive about the changes. She said the Government had held back from more radical reforms it originally proposed.  

“There has been minor relaxation of the strict rules prohibiting detrimental changes to employees' terms, but it remains to be seen whether slight changes in the regulations in this area will make any real difference in practice,” she said.

“Uncertainty remains and further case law will be needed to establish the full effect of the new rules."

The Department for Business, Innovation and Skills has published new guidance to explain the TUPE reforms.