Changes to the TUPE regulations, which protect the interests of employees when a business is transferred to a new owner, have now come into effect.
The changes mean that employers can now renegotiate terms and conditions with their staff one year after they have taken control of a company, provided that the overall offer is no less favourable than the existing one.
Buyers can also begin redundancy negotiations with staff before they have taken over if permission is granted by the selling company, and smaller firms can communicate directly with their employees, whereas before they usually had to go through an official representative such as a trade union or spokesperson.
The other major innovation is that changes to employee contracts will be permitted for economic, technical or organisational reasons with the agreement of the employee and/or where a contractual right of variation exists.
The amendment to the Transfer of Undertakings (Protection and Employment) regulations (TUPE) came into force on 31 January.
The regulations also clarify the existing law in cases where employees’ terms and conditions are provided for in collective agreements. In these circumstances, only the terms and conditions in the collective agreements that are in place before the date of transfer will apply.
Any future changes will not bind the new employer, unless it has taken part in the bargaining process that brought about the changes.
Employment Relations Minister Jenny Willott said: “When a business is transferred from one company to another we want to make sure that TUPE continues to provide appropriate levels of employee protection, whilst making the process as smooth as possible for the businesses involved.
“Making these changes will give businesses more clarity about conducting transfers and provide them with the tools to create new opportunities in the UK labour market, whilst protecting fairness for all.”
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