On 16 May 2024 the government issued a 'Consultation on clarifications to the Transfer of Undertakings (Protection of Employment) Regulations 2006 and abolishing the legal framework for European Works Councils'. Despite the fact that there will be a General Election on 4 July, the consultation remains open and will close on 11 July 2024.
TUPE
As far as TUPE is concerned the consultation proposes making changes to clarify that it does not apply to workers and also to clarify the application of TUPE where a single business is transferred to multiple transferees.
Prior to the employment tribunal decision in Dewhurst v Revisecatch Ltd it was generally accepted that regulation 4 of TUPE only applied to transfer the contracts of employment of employees. However, in Dewhurst the tribunal held that workers satisfying the definition of section 230(3)(b) of the Employment Rights Act 1996 fell within the remit of TUPE. Although it was only a first instance decision and therefore not binding, the decision in Dewhurst has led to some uncertainty as to the scope of the application of TUPE. The consultation proposes amending the definition of "employee" within TUPE to specifically state that workers do not fall within the scope of protection of TUPE.
Another area of uncertainty was introduced by the ECJ decision in ISS Facility Services v Govaerts (then followed in McTear) where it was held that it is possible for an employee's full-time employment contract to be split into two or more parts and transferred to two or more different entities upon a relevant transfer. Prior to Govaerts it had not been possible for employment contracts to be fragmented in this way and there are currently no provisions within TUPE governing how this should be done.
As the consultation points out, this position can have impractical consequences where employers are required to work between multiple sites and also regarding the division of employees' terms and conditions between multiple employers. In light of these difficulties, the consultation proposes amending TUPE to clarify that an employment contract may only be transferred to one employer and may not be split between multiple employers. Instead, 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. It is not clear what the mechanism would be if the parties cannot reach agreement.
European Works Councils
The government states in the consultation document that it was never the intention for EWCs in the UK to be required to continue to operate indefinitely following the UK's transition from the EU and proposes the repeal of the legal framework for legacy EWCs in the UK. This would include repealing the current requirement to maintain existing EWCs. Currently approximately 70 multinational corporations in the UK have both EWCs and UK Works Councils.
