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In this issue of our Employment Newsletter:

Keeping abreast of reform and developments in the employment law arena has always been a challenge but perhaps never more so than at present. In this edition of our Employment Newsletter we focus on some practical aspects of managing Data Protection in the workplace.

Amendments to TUPE

The Transfer of Undertakings (Protection of Employment) Regulations 2006 were amended with effect from 31st January 2014 by the Collective Redundancies and Transfer of Undertakings (Protection ofEmployment) (Amendment) Regulations 2014 (“the Amendment Regulations”).

The Amendment Regulations make changes to the:

  • Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE Regulations”); and
  • The Trade Union and Labour Reform (Consolidation) Act 1992 (“TULRCA”)

The Department for Business Innovation and Skills (BIS) have also published a detailed guide to accompany the changes.


The key changes to the TUPE Regulations are:

Unfair dismissal

There has been a subtle but potentially significant change to the provisions restricting dismissal where the TUPE Regulations apply.

Under the original 2006 TUPE Regulations, a dismissal would be automatically unfair where the reason for the dismissal was either the transfer or a reason connected with the transfer (which, in the latter case, was not an economic, technical or organisational reason entailing changes in the workforce).

The Amendment Regulations have the effect that the restrictions on dismissal will now apply only where the sole or principal reason for the change is the transfer itself. Accordingly, dismissals will not be automatically unfair where:

  • The reason for the dismissal is unrelated to the transfer; or
  • The reason for the dismissal is an economic, technical or organisational reason entailing changes in the workforce (an “ETO Reason”).

The Amendment Regulations also reverse what was considered an anomaly under the original 2006 TUPE Regulations by classifying a ‘change of location’ redundancy as an ETO reason. Previously, such dismissals, which could be regarded as fair redundancy dismissals for the purposes of the Employment Rights Act 1996, were rendered automatically unfair under the TUPE Regulations.

These changes will affect dismissals where the relevant transfer date is on or after 31st January 2014.

Changes to terms and conditions

The subtle changes to the provisions relating to unfair dismissal have also been effected in relation to the restrictions on changes to terms and conditions of employment.

Under the original 2006 TUPE Regulations, variations to contracts of employment by reason of the transfer or by reason connected with the transfer (which was not an ETO reason) were void. The change in approach (which brings the TUPE Regulations closer into line with the EU Acquired Rights Directive) has the effect that changes to terms and conditions of employment will not be void where:

  • The sole or principal reason for the variation is unrelated to the transfer; or
  • The sole or principal reason for the variation is an economic, technical or organisational reason entailing changes in the workforce (and the variation is agreed between the parties); or
  • The terms of the contract permit a variation (for example, a flexibility or mobility clause); or
  • The variation to the terms of employment is entirely positive from the employee’s perspective.

It remains the case that variations to contractual terms made only with a view to harmonising terms of employment between the transferee’s original workforce and employees transferred into the workforce will not be valid variations.

The BIS Guidance does not provide any real insight into the Government’s expectations around the change to the TUPE Regulations by the removal of the restrictions (both in relation to dismissals and variations to contractual terms) where the reason for dismissal or variation is for a reason ‘connected’ with the transfer rather than the transfer itself. Unhelpfully, the Guidance suggests that the sole or principal reason under the amended TUPE Regulations may include reasons which under the earlier legislation may have been merely ‘connected’ with the transfer. We will need to await the tribunals’ interpretation of this new test and it will remain the case that each case will in any event depend very much on its own facts.

Collective Agreements

In addition, of further assistance to employers seeking to regulate terms of employment post transfer, the Amendment Regulations provide that:

  • Employment terms derived from collective agreements will be effectively frozen at the point of transfer and unaffected by subsequent collective bargaining by the transferor;
  • Changes can be made to terms of employment agreed pursuant to collective agreements one year following the transfer provided that overall the change is no less favourable to the employee.

Other important changes to the TUPE Regulations include:

Employee Liability Information

In relation to transfers taking place on or after 1st May 2014, employee liability information must be provided by the transferor to the transferee no later than 28 days before the transfer. The period was previously 14 days. Employee liability information includes: the identity and age of the employee; particulars of employment and any applicable collective agreement; details of disciplinary and grievance issues and details of actual or likely legal action.


With effect from 31st July 2014, micro businesses (where the number of employees in the business is fewer than 10) need not elect new appropriate representatives for the purposes of information and consultation relating to a relevant transfer. The employer of affected employees in a micro business must still comply with the requirements to inform and consult but there is no requirement to elect representatives; instead employees will be informed and consulted on an individual basis.

Service Provision Change

It had been proposed during the consultation phase prior to the introduction of the Amendment Regulations that the service provision change regulations introduced by the original 2006 TUPE Regulations would be repealed. This proposal has not been implemented but instead the current case law has been codified to clarify that, for TUPE to apply, activities before and after the transfer must be “fundamentally the same”.

There has been a significant body of case law around the meaning of the phrase “fundamentally and essentially the same”. The phrase is not to be interpreted as widely as was first understood.

Minor changes in the nature or scope of services provided or even a change of ethos can mean that TUPE does not apply. It remains important however to consider each particular case on its own facts and also to remember that TUPE protection may be triggered by the transfer of an economic entity (an organised grouping of resources) which retains its identity as well as by way of service provision change.

Amendments to TULRCA

S.188 of TULRCA requires that, where an employer proposes the dismissal of 20 or more employees within a period of 90 days, the employer is required to consult on a collective basis with either a trade union or elected representatives of employees about the proposed dismissals.

Mass redundancy exercises often arise in the context of TUPE and historically there has been uncertainty over whether consultation with affected employees of the transferor (or Seller) by a transferee (or Buyer) can count for the purposes of S.188.

With effect from 31st January 2014 a new procedure has permitted the transferee (Buyer) to stand in the transferor’s (Seller’s) shoes as the employer of affected employees prior to the transfer for the purposes of collective consultation provided that certain procedural steps are complied with.

At first glance this development provides comfort for transferee employers who envisage redundancies following a transfer not least as the economic benefits of pre-transfer consultation are significant. However, there is no obligation on the transferor to co-operate with a request under the procedure. The development might therefore also be considered to suggest that more informal consultation arrangements will not count for the purposes of TULRCA leaving many employers in a potentially worse situation than under the previous rules.

Consultation under TULRCA must be meaningful and the BIS Guidance suggests that it will be difficult to establish that consultation is meaningful where the transferor has not agreed to it or co-operated.

There are also practical issues arising out of this development: we would recommend that where there is agreement to use the new procedure, it may be also appropriate to put in place a formal ‘pre-transfer consultation agreement’ between the parties to regulate the process and risk (not least as the liability for any failure to properly inform and consult employee representatives will be that of the transferee once an election has taken place).

For clarity, it remains the case that no dismissals can be effected by the transferee until after the transfer has taken place.

Mandatory Early ACAS Conciliation

On 6th April 2014, the new ACAS Early Conciliation service will be introduced through the Employment Tribunals (Early Conciliation: Exemption and Rules of Procedure) Regulations 2014.

The impact will mean that, before any claim can be raised to an Employment Tribunal, a prospective claimant will have to contact ACAS and provide certain information using a prescribed form. The process will involve the following:

The prescribed form, known as the Early Conciliation form, can be submitted online or by post (or by simply telephoning ACAS) and will only require the contact details of the parties involved. Details of the nature of the potential claim(s) will not have to be provided.

Once the form has been submitted, this will “stop the clock” on the time period for raising a claim in the Tribunal. ACAS will have month from the date of submission of the form, or the date of the telephone call, to contact the prospective claimant and attempt to promote settlement.

Where the prospective claimant wishes to pursue conciliation, ACAS must contact the respondent and attempt to settle the matter. The one month time period for achieving settlement can be extended by up to 14 days where both parties consent and where the conciliation officer considers that there is a reasonable prospect of achieving settlement before expiry of the extended period.

If settlement cannot be achieved, such as where the parties cannot be contacted or where it looks unlikely to succeed at any stage of the process, ACAS will close the matter and issue a certificate containing a unique reference number. This certificate is an essential part of the process as it will confirm that the prospective claimant has complied with their obligation to contact ACAS and it will enable them to submit a claim form to the Tribunal.

The ET1 form will be amended so that claimants have to insert their unique reference number onto their claim form so as to prove that they have complied with the early conciliation process.


Whilst the new process is compulsory, it is still up to the parties whether they are actually prepared to get involved.

If the prospective claimant does not wish to conciliate and simply wants the certificate to be able to issue a claim, then ACAS will not even contact the prospective respondent.

So, arguably, the conciliation process is still as voluntary as it has ever been. Also, it will still be possible to conciliate through ACAS, after a claim has been submitted, in the same way as is currently available.

As any decision on jurisdiction to hear a claim is for the Tribunal to decide, it would seem that where a prospective claimant wishes to pursue conciliation but does not appear to have a claim (for example where they are already outside the time limit), ACAS will still have to follow the Claimant’s wishes and promote settlement with the respondent, regardless.

Employers should also bear in mind that once this process comes into force, the time limit for a prospective claimant to raise a claim in the Tribunal will be three months plus the time it takes for ACAS to conciliate (which could be up to 6 weeks).

Financial Penalties on Employers

Tribunals will soon have the power to impose financial penalties on employers who lose at Tribunal. From 6th April 2014, where an employer loses a claim and its behaviour has one or more “aggravating features”, penalties of between £100 and £5,000 can be imposed. Such penalties will be payable to the Secretary of State and will be in addition to any compensation awarded and payable to the claimant.

Where a financial award is made to a successful claimant, any financial penalty issued to the employer must be 50% of the successful claimant’s award (subject to the cap of £5,000). Where a non-financial award is made, the Tribunal will have the power to assess and impose a monetary value.

It will be for the Tribunal to determine whether there are any “aggravating features”. Whilst there is some guidance on what “aggravating features” may be, it only provides some non-exhaustive points which a Tribunal may consider. This guidance suggests that penalties are more likely to be imposed where there is deliberate, malicious or negligent behaviour on the part of the employer. The size and resources of the employer, as well as the duration of the breach, are also stated to be relevant factors. However, pleasingly for employers, it is suggested that short or one-off breaches or genuine mistakes will not be penalised.

There is some further comfort for employers in that a discount of 50% will be applied where the penalty is paid within 21 days. It is also worth noting that multiple claims in respect of the same act will only face a single penalty being imposed.
This change does not sit easily with the Government’s stated aim of trying to reduce the burden and “red tape” on employers. It will be interesting to see how the Tribunal interprets the “aggravating features” and the extent to which penalties will be imposed, in practice. Clearly, employers need to be aware of this potential risk and to take it into account in how Tribunal claims are handled.

Discrimination Questionnaires Abolished

The statutory discrimination questionnaire procedure currently operates so that individuals can raise specific questions with an organisation to try and discover why they have been subjected to certain treatment and whether there has been any discrimination.

The questionnaire can be submitted can be submitted before or after a discrimination claim is lodged. Whilst a response is not compulsory, where a business fails to respond within 8 weeks, the Tribunal can draw adverse inference from that failure when determining the outcome of a claim.

However, as part of the Government’s commitment to reducing the “red tape” burden on employers, the statutory discrimination questionnaire procedure will be abolished as of 6th April 2014. In its place, ACAS has produced guidance which provides recommended steps for individuals on how to raise questions about alleged discrimination under the Equality Act 2010. It also provides guidance on how employers should respond to such questions.

Whilst there will be no obligation on employers to respond to such questions from 6th April 2014 and whilst no adverse inference can be drawn, in practice the Tribunal may still take the response (or lack of response) into account when deciding on the outcome of a claim.

It will therefore remain important for employers to take any questions received, relating to alleged discrimination, seriously and to respond appropriately by reference to the recommended steps provided in the ACAS guidance.

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