Under current TUPE regulations, employees' terms and conditions of a contract are protected and are generally not allowed to be changed.
However, under the new rules, employers will be allowed to make amendments provided that overall changes are "no less favourable".
TUPE protections make sure that employees don't unfairly lose out when a transfer takes place and set out the rules that the old and new businesses have to follow.
The announcement came in a Government response yesterday to a consultation on TUPE reforms, which it said aimed to make the process of employee transfer from one to business to another "easier, fairer and more effective".
New rules
The announcement by the Department of Business of Innovation and Skills (BIS) said where employees have terms and conditions provided for in collective agreements, only those existing at the time of the transfer will apply. Later changes to the collective agreement will not bind the new employer.
Rules will be amended so that, where the place of work changes after a transfer, redundancies will not be automatically unfair.
"This means that, as a starting point, businesses will not face possible unfair dismissal claims simply because of a change in location of the workplace,'' said BIS.
Micro-businesses, those with fewer than 10 employees, will be allowed to inform and consult employees directly when there is no recognised trade union or other representatives.
Employment relations minister Jo Swinson said: "By making these changes we will clear out the cobwebs in some of the rules which will give businesses more clarity about conducting transfers."
More clarity
Unions said the changes means thousands of workers lose "vital" protections at work.
"Weakening guarantees on pay and conditions will encourage companies to compete for contracts based solely on wage and other employment costs, and not on the quality of service," said TUC general secretary Frances O'Grady.
Clare Gregory, partner at DLA Piper, told HR magazine the changes will be welcomed by employers.
"The Government has resisted the temptation to deregulate for the sake of deregulation, instead the proposals will bring more clarity to businesses engaged in the transfer of an undertaking or outsourcing of services," Gregory said.
"These changes reflect the commercial realities of business transfers and will make it easier for UK businesses to adapt to changing economic conditions."
The changes will be presented to Parliament on 1 December 2013.
