At present, there are very limited circumstances where an employer can comply with its duty to inform and consult representatives under regulation 13 of The Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) by informing and consulting directly with the affected employees.
By way of reminder, informing and consulting directly with the affected employees would be compliant with regulation 13 where there is no trade union recognised for the affected employees and either:
- the employer has less than 10 employees in total (this does not mean less than 10 employers are affected and therefore will only apply to very small employers described in the regulations as a “micro-business”); or
- the employer has invited the affected employees to elect representatives and they have failed to do so within a reasonable time.
Despite both scenarios being fairly rare, it is actually quite common for employers, in particular those who do not have a recognised trade union or some form of employee representative body, to inform and consult directly with the affected employees nevertheless. This is the case even though this approach risks a successful claim being presented to the employment tribunals for a breach of regulation 13 and a protective award, which can be up to 13 weeks gross pay per employee, being made.
The reason why many employers take this risk (sometimes a calculated risk, sometimes simply because they misunderstand TUPE) is the ease of communication the approach provides. My experience suggests that it works – well informed employees are happier employees and happier employees tend not to pursue claims. Employees will rarely know whether their employer has complied with TUPE but will have a strong opinion on whether they feel cared for and looked after. If the elected representatives do not communicate well, doing it “by the book” can lead to some affected employees feeling left in the dark unless additional steps, not technically required by TUPE, are taken to ensure they feel fully “in the loop”.
Many employers will consider the changes which will apply to relevant transfers that take place from 1 July 2024 onwards as a positive change. In summary the changes are that, provided that there is no trade union recognised for the affected employees, the employer can inform and consult directly with the affected employees where:
- the employer has less than 50 employees; and
- there are fewer than 10 transferring employees (transferring employees being defined as employees who work for the transferor and who are, or are likely to be, transferred to the transferee under a relevant transfer).
The second of the two changes is an interesting one as it creates a new definition of a “transferring employee”, distinct from affected employees which is defined in regulation 13 and was and remains the group of employees who the employer must inform and consult. The key distinction between “transferring employees” and “affected employees” is that affected employees includes employees of the employer who are not actually due to transfer but may be affected by the transfer in addition to the “transferring employees”.
I can see this distinction, and the existence of two definitions, causing employers to slip up by failing to comply with their duty to inform and consult because they limited their focus to the transferring employees only and ignored other affected employees. Despite this slightly clunky distinction in the new regulations I consider that both employees and employers, particularly SMEs, will welcome the upcoming changes that will limit the number of situations where employers will have to facilitate the election of employee representatives in order to comply with their TUPE obligations.
For more information or advice on this or any other Employment Law & HR issue, please get in touch with James Symons on 0115 9 100 250, or send him an email.
Posted on January 9, 2024
