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Eversheds comment: UK Government rethinks TUPE Reform

  • United Kingdom

    05-09-2013

    The eagerly awaited UK Government Response to its consultation over Transfer of Undertakings Protection of Employment (TUPE) reform has been issued today and, in a surprise turnaround, reveals a significant change of heart over proposed changes to the current 2006 TUPE Regulations. Discussing how the changes will affect business, Simon Rice-Birchall, partner in global law Firm, Eversheds comments:

    “The Government Response has avoided the more drastic elements expected in the reforms and it looks like we’re going to get a more of a ‘tidy up’ of the current TUPE regulations, rather than a major overhaul. It is good to see the Government has taken on board feedback received in the consultation.

    “The most high-profile and controversial change proposed - the removal of regulations regarding ‘service provision changes’ (SPCs) - will not now be pursued. While bringing certainty in terms of when the regulations apply, SPCs have also been criticised for increasing costs so business, not to mention being used as an example of the UK ‘gold-plating’ EU requirements. While ‘gold-plating’ is not always contrary to the interests of business, legal certainty and budgeting considerations have taken precedence over any such concerns on this occasion. Little wonder, a return to the uncertainty and confusion of the past would be hugely problematic. The potential for transferor contractors to incur unexpected and unwelcome redundancy costs would also have led inevitably to financial hardship and disputes.”

    “The changes revealed today remedy several problems and discrepancies, and provide pragmatic solutions to some of the more challenging aspects of the 2006 regulations. It will be interesting to see the way in which the courts will approach this subtle change in language and the effect this could have."

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