March 10 2014.

New rules affecting the process of transferring business ownership came into force at the end of January 2014.

Changes were made to the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), which protect the employment terms and conditions of employees who are transferred from one organisation to another. The regulations aim to make sure both employers and staff are treated fairly when a transfer takes place.

Under the new regulations businesses will be able to renegotiate terms and conditions in collective agreements one year after a transfer has taken place, provided that the overall change is no less favourable; micro businesses will be able to inform and consult employees directly when there are no existing appropriate representatives; the new employer will be able to engage in pre-redundancy consultation with employees, with the consent of the old employer; and contractual changes will be permitted for economic, technical or organisational reasons with the agreement of the employee and or where a contractual right of variation exists.

The regulations also clarify the existing law in a number of areas. In cases where employees’ terms and conditions are provided for in collective agreements, only the terms and conditions in the collective agreements that are in place before the date of transfer will apply; and the test for service provision changes will make clear that activities carried out after the change in provider must be fundamentally the same as those carried out by the previous person who has ceased to carry them out. CLICK HERE for more information.