TUPE to be reviewed as part of law shake-up

Reprinted from an article by Claire Churchyard - People Management

The government has announced plans to review Tupe regulations, as well as collective redundancy and discrimination compensation, as part of its efforts to reduce the burden of red tape.

The three newly-targeted areas were highlighted by Ed Davey, Minister for Employment Relations, in a speech to the Institute for Economic Affairs. He said that Tupe (Transfer of Undertakings Protection of Employment) regulations which protect employees’ pay and conditions when an organisation is transferred from one owner to another, were being reviewed because some businesses think these rights are “gold plated” and overly bureaucratic.

Discrimination compensation could also be slashed as employers criticised the unlimited and unpredictable levels of award given by tribunals and said that large payouts could encourage ‘vexatious claims’.

Collective redundancy rules will be reviewed as employers have said that the 90 day minimum consultation period is “hindering their ability to restructure efficiency and retain a flexible workforce”. Employers in financial strife said they worry about how long they will need to go on paying staff after it is clear they need to let them go.

Davey said: “The areas we are reviewing are priorities for employers. We want to make it easier for businesses to take on staff and grow.

“We will be looking carefully at the arguments for reform. Fairness for individuals will not be compromised – but where we can make legislation easier to understand, improve efficiency and reduce unnecessary bureaucracy we will.”

Steve Radley, director of policy at EEF, the manufacturers’ organisation, welcomed the review but added: “We also need to see a change in culture from government with significantly less use of regulation to achieve its aims.

“With another consultation due next week on new flexible rights for employees, the government must be careful that it is not giving business more flexibility with one hand and taking it away with the other.”

But Unite’s general secretary Len McCluskey criticised the plans as an “onslaught on working people” and called for “the bonfire of employee rights” to be extinguished.

Ben Willmott, CIPD senior public policy adviser, questioned what scope the government would have to reform these laws given they are underpinned by European legislation.

He said that on the issue of compensation for discrimination claims, for example, there was an European Court of Justice ruling (1993) that said fixing an upper compensation limit wouldn’t adhere to the equal treatment directive.

“In light of this it’s difficult to see any scope for imposing a limit on discrimination compensation claims.”

Willmott said the CIPD supported current collective redundancy legislation.

He also supported “simplification” of the “extremely complex” TUPE regulations but explained that while there might be scope for improving the guidance, the legal framework underpinning it was from Europe so it might be harder to make the actual law simpler.