DTI wants to change law for transferred employees

By amending the TUPE Regulations – properly called the Transfer of Undertakings (Protection of Employment) Regulations 1981 – the DTI promises increased legal protection for all those involved in business transfers.

The TUPE Regulations were first introduced to implement the Acquired Rights Directive, adopted by the European Community in 1977 and revised in 1998. The proposed reforms will bring UK legislation into line with the current form of the Directive.

The revisions will mainly:

• give more comprehensive coverage to service contracting operations (not including those involving high-level "professional services," in relation to which disputes rarely arise at present), with the aim of improving the operation of the market and promoting business flexibility;
• introduce a requirement on the old employer (transferor) to notify the new employer (transferee) of the employment liabilities that will be transferring, thus increasing the transparency of the transfer process and combating 'sharp practice';
• clarify the circumstances in which employers can lawfully make transfer-related dismissals and negotiate transfer-related changes to terms and conditions of employment for 'economic, technical or organisational' (ETO) reasons; and
• improve the way TUPE operate when insolvent businesses are sold, to help promote the 'rescue culture' and save businesses that would otherwise be lost.

According to the Trade and Industry Secretary, Patricia Hewitt, employees in low-paid service jobs will particularly benefit from the proposed reforms.

Ms Hewitt said that a public consultation on the draft revise regulations will be carried out this year, with a view to placing them before Parliament in autumn 2003. The new regulations are expected to come into effect in spring 2004.

According to the DTI, the reforms will not cover the issue of occupational pension rights, which will be considered separately to a longer timescale.