“The proposal to remove most Service Provision Changes (SPCs) from the scope of TUPE may ultimately have a negative effect. It is true that this definition - introduced under TUPE reforms in 2006 - has led to litigation, however, this is often the case with HR reforms.
“While there are cogent arguments that TUPE is currently too broad, in most outsourcing, retenders and insourcing cases, customers and service providers still generally accept that TUPE will apply (whether they are in favour of TUPE or not). This means that most cases are dealt with on a pragmatic basis. It is suggested that removal of SPCs entirely may introduce more uncertainty though - after all, the aim of the SPC aspect is to provide a level playing field.
“In addition to the proposal to remove SPCs, there are two proposals which could have a significant impact. Firstly, any changes to the location of the workforce under TUPE (because the new employer requires the employee to do the same job from its existing location as it rationalises the business) is helpful, as it won’t automatically be unfair. There have previously been some odd decisions in relation to this which really did give TUPE a bad (or worse) name.
“Secondly, the consultation clarifies that time spent by employers ‘pre-transfer’ while consulting with staff on redundancies can ‘count’ towards the 30 or 90 days which is required for large scale redundancies. This is in the interest of employers as it allows them to progress with their businesses without having to, what appears like, artificially extend consultation after the transfer. In larger scale outsourcing projects especially, there can be a long lead time and ample time for consultation with all issues being resolved. Therefore, having to cover the same ground again for 30 or 90 days is unhelpful. From an employee’s perspective, the changes will bring greater clarity on their position and when they can expect to be released, if they are made redundant as a result of the process.
“This counting provision is straightforward where the current and future employer are cooperating. This will be the case where a customer is outsourcing directly to its supplier. Transfers between suppliers however can be more problematic if the outgoing supplier/employer is reluctant to grant access to staff, therefore, consideration might be given to a requirement in this regard. I suspect that this would not be acceptable to the Government given the overall reluctance to legislate in commercial matters. One solution would be for the customer to include provisions in their commercial agreements which require suppliers to cooperate as part of a transition plan when contracts come to an end.”