The Government has issued a consultation on proposed changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006. One of the most significant proposed changes is to repeal the ‘service provision change’ coverage, under which contracting out, contracting in and retendering exercises were expressly brought within the scope of TUPE. Other proposals for reform include changing the wording of the restrictions on varying contracts or dismissing in relation to a TUPE transfer, so that these restrictions more closely reflect the minimum requirements of the EU Acquired Rights Directive.
The proposed repeal of the ‘service provision change’ (SPC) provisions comes in response to business concerns that the Regulations ‘gold plate’ the Directive. The Government notes that it is not clear that the intended benefits of the SPC provisions, such as increased clarity over when the Regulations apply, have been realised. It also accepted evidence that the SPC provisions may have anti-competitive effects, in that transferors may use an SPC as a means of keeping only the employees they wish to retain and transferring those they wish to lose. The Government states that there will be a lead-in period before any repeal to accommodate SPCs currently in preparation.
Paul Burton, Employment Solicitor, says "On the same day, the Government has published its response to the ‘Ending the Employment Relationship’ consultation. The most significant proposal there is to cap the compensatory award for unfair dismissal at one year’s pay." The current cap (£72,300) would remain in place, meaning that the effective limit for a successful unfair dismissal claimant would be whichever of the two amounts is lower.
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