UK: Consultation on Clarifications to TUPE & Abolishing European Works Councils

Authors: Rob Hill, Corinna Harris and Sophie Jackson

The consultation proposes making changes to:

• Clarify that TUPE applies to employees and not to workers: TUPE is stated to apply to ‘employees’ but the definition of ‘employee’ is looser than in other UK employment legislation which has lead to a tribunal decision that TUPE also applies to workers. Although that decision is not binding on other tribunals, it has resulted in uncertainty on whether TUPE applies to workers. The government therefore wants to resolve this by specifically removing workers from the scope of protection under TUPE.
• Clarify the application of TUPE where a single business is transferred to multiple buyers: The government’s proposal is that, on a transfer, an employment contract may not be split between multiple employers, and the employers taking over the business or service would be required to agree which one of them should be responsible for each employee’s contract.
• Abolish the legal framework of European Works Councils in the UK: Following Brexit, the government legislated to prevent any new Works Councils (consultative bodies representing the European workforce in multinational organisations) being formed. They now propose to allow those already in existence to be disbanded.

In a separate development, the government has confirmed that the new Code of Practice on Dismissal and Re-engagement will be brought into force by July 2024, once it has been approved by Parliament. We have reported on this Code previously: Top 5 recent workplace developments – March 2024

Key Action Points for Human Resources and In-House Counsel

The Government intends that the consultation, which closes on 11 July 2024, forms part of its drive to reduce uncertainty and cut red tape.  The proposals to amend TUPE are unlikely to have a significant impact in practice although, in relation to the second point above, there is insufficient information at present to understand how the rules will deal with how transferee employers might agree which of them will inherit which employees and what happens if they can’t agree.