Could Brexit mean a reform for TUPE?

What will happen to all of the laws in the UK which derive from the EU following Brexit? The short answer is not a lot, with the Government’s Great Repeal Bill being introduced to convert all existing EU legislation into UK law.

Following this, however, the UK will be free to amend or repeal any of these laws, in the same way it can any other domestic law.

Given that there are a number of significant aspects of UK employment law which derive from the EU, many commentators on employment law have speculated as to how this area will be affected following Brexit. One of the main sources of speculation is TUPE, with much debate on whether aspects of the existing law will be repealed, modified or retained following Brexit.

TUPE, or The Transfer of Undertakings (Protection of Employment) Regulations 2006 to give it its full name is a piece of legislation, implemented into UK law from the Acquired Rights Directive which is binding on all EU member states. Its purpose is to protect the rights of employees when there is a transfer of the undertaking they work for or there is a service provision change, which it achieves by transferring the employee’s contract of employment to the new entity.

So, are we to expect vast changes to TUPE following Brexit? The answer is probably not, but there may be some tweaks to its operation in the coming years which may appeal to business owners.

The first thing to say is that an outright repeal of TUPE is highly unlikely, not least because it would go against the stated policy of the Government and the widespread support it appears to have amongst the business community as shown by the response to the Government’s consultation on proposed changes to the service provision change rules in 2014. The feeling at that time was that TUPE provided relative certainty as regards the rights of employees in business transfer and service provision change scenarios.

However, we have explored below a few of the potential changes to TUPE that we could see in the future:

  1. Firstly, following Brexit it is expected that the UK will no longer be bound by the decisions of the European courts, which may lead to a shift in the way TUPE decisions are decided in the UK courts;

 

  1. The Government may also look to widen the insolvency scenarios in which investors are able to rescue insolvent businesses free from certain TUPE obligations;

 

  1. We may also see a fairer distribution of liabilities for claims brought by employees who object to a transfer before it happens due to statements or proposals made by the proposed new employer but are legally only able to sue their existing employer; and

 

  1. A popular development may also be for the Government to provide more scope for employers to harmonise or change terms and conditions following TUPE transfer. Currently, any change which is made by reason of the transfer will be null and void, even if it has been agreed by the employee. It has been speculated that the Government may look to change TUPE so that such changes are treated in the same way as any other contractual change.

With a lot on its plate in the run up to Brexit and beyond, it is unlikely that changes to employment legislation will be high on the Government’s list of priorities. However, as the dust starts to settle following Brexit it will be interesting the see how UK lawmakers respond to the newly acquired freedom to amend existing laws which derive from the EU.

For more information on this, call 0161 926 9969 or send us an email to: employment@mlplaw.co.uk