Employers will welcome the proposals for new, less burdensome rules relating to staff on a transfer of business, due to become effective mid-January 2014. The measures are currently only proposals, but we report on them now because they are potentially so significant.

New rules on collective consultation for redundancies

Where a buyer wishes to dismiss 20-99 employees from its workforce including at least one transferring employee, it is proposed that a buyer will be able to choose whether to consult with affected employees about the potential redundancies before the transfer takes place but only if the seller agrees. This will enable a buyer to make redundancies immediately after the transfer.

New rules for micro-businesses

Where no Trade Union is recognised, it is proposed that an employer with fewer than 10 employees will be able to inform and consult about the proposed transfer directly with affected employees. Currently they need to put in place time-consuming mechanisms to elect and consult with employee representatives.

New rules on dismissal

Currently, an employer may, in the main, only dismiss employees because of the transfer where it needs fewer employees to carry out the work. From January 2014, it is proposed that an employer may be able to dismiss employees because of the transfer even where it needs the same number of employees provided there is a need for a change in location.

New rules on varying contracts

Under the proposed new rules, a buyer may be able to vary the terms of a contract much more easily because of the transfer if:

  • it can demonstrate a need for a change in location; or
  • the terms of the contract include a right to vary its terms

A buyer will be able to change the contract of a transferring employee by collective agreement after one year following the transfer, provided the terms offered to the employee are overall no less favourable.

And finally, it is proposed that from mid-April 2014, a buyer will be able to send information to a seller about the measures it proposes to put in place affecting transferring employees 28 days before the transfer rather than the existing 14 days.

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Updates: For employers: Buying or selling a business | TUPE |

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