TUPE or not TUPE?

TUPE or not TUPE? That is the question! This has (sadly) for many years been a common joke for employment lawyers but with the Brexit vote looming it may now be a serious question.

It is my view that if there is a ‘yes’ vote on 23^rd June, the TUPE legislation will be changed or modified. Here is why.

TUPE is a child of EU law. ‘A service provision change’ is however a UK statutory concept that was introduced in 2006 to give greater legal certainty to when TUPE would apply to service provision changes. Before then a service provision was to be determined under the EU definition of a transfer.

In 2013, the government consulted over proposed changes to TUPE because they felt that, ‘given its complexity, smaller firms will often struggle’ with the ‘TUPE framework’ (BIS Consultation paper January 2013). They suggested that the 2006 changes ‘may have imposed unnecessary burdens on businesses’. Two key areas the government were keen to look at were ‘whether to repeal the regulations covering service provision changes’ and ‘the scope for post transfer changes to terms and conditions’.

What is clear from the 2013 consultation is that the government’s appetite for TUPE and the EU directive is not great. There are also clear signs from the Judiciary that they are keen to narrow down what service provision changes fit within the definition under the regulations. Also, the inability to harmonise terms and conditions of employment of employees following a transfer has always been a real ‘bugbear’ for transferees. Harmonisation is not permitted on the basis of existing EU case law.

In the end, the government did not repeal the regulations dealing with service provision changes, one of the main reasons being that the Directive would still apply meaning that there will ‘always be some inherent uncertainty’ (Government Response to Consultation September 2013).Of course if we leave the EU there will no longer be the requirement to implement EU Law or for domestic courts to ensure compliance with it.

I do not think that there will be a wholesale removal of TUPE should we leave the EU. The government will, in my view, maintain the law as it exists on exit.Changes will then be made over time through further legislation and case law. I accept that my points above might be academic given that the terms of a trade deal between the UK and the EU may dictate what provisions of EU employment legislation the UK will be required to comply with.