Beyond borders: how TUPE differs between Great Britain and Northern Ireland
03 August 2023
Over recent years, the laws governing TUPE have diverged between Great Britain and Northern Ireland. This is due to Northern Irish employment law largely remaining static, while there have been some minor, but occasionally important, amendments to TUPE in Great Britain. With changes on the horizon, further divergence between the jurisdictions is likely. Employers who are involved in TUPE transfers should be mindful of the important differences between the jurisdictions.
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) protects employees when the business or organisation they work for transfers to a new owner and when a service transfers to a new provider. TUPE applies in Northern Ireland (NI) but with two important differences. First, the service provision change aspects are governed by separate local legislation. Second, the changes that were made to TUPE in 2014 in Great Britain (GB) do not apply in NI. The TUPE position in NI therefore remains as it was in GB before 2014.
On 10 May 2023 the current British government published a policy paper entitled “Smarter Regulation to Grow the Economy”. As we previously explained this includes some proposed (albeit limited) reforms to TUPE, removing the requirement to elect employee representatives for businesses with fewer than 50 people and transfers affecting less than 10 employees, allowing businesses to consult directly with affected employees. While we await more information about the government’s proposals, the Labour party in GB has promised to “strengthen the existing set of rights and protections, including for…workers subject to TUPE processes”. It is not clear what this phrase might mean.
With both major political parties promising some type of reform, albeit in different directions, change is on the horizon. As most employment law is devolved to the Northern Ireland Assembly to legislate on, these proposals only relate to employment law in GB. The current lack of a functioning Assembly and government in NI makes it impossible to predict with confidence what may happen in NI regarding these proposals. However, previous experience suggests that the status quo will likely remain meaning that further TUPE divergence between GB and NI looks likely.
The key differences between TUPE in GB and NI are set out below, which include the main changes introduced in GB in 2014.
|What the law is called||TUPE||TUPE and, in relation to service provision change, the Service Provision Change (Protection of Employment) Regulations (Northern Ireland) 2006|
|Ability to make redundancies||
The new employer (transferee) can consult with the current employer’s (transferor’s) employees about proposed collective redundancies prior to the transfer taking place, provided the transferor agrees to this.It is useful for new employers to begin their legally required consultations prior to the transfer to lessen their payroll burden post-transfer.
|While TUPE does not prevent the new employer consulting about redundancies in advance, the minimum required period for redundancy consultation (30 days for 20-99 employees, and 90 days for 100 plus affected employees) is not deemed to start prior to transfer. Unions are aware of this, which affects notice and payments.
|Deadline for the transferor to provide ‘employee liability information’ (required information about the transferring employees)
||The information must be provided at least 28 days prior to the transfer.
||The information must be provided at least 14 days prior to the transfer.
Automatically unfair dismissals (a dismissal is automatically unfair if the sole or principal reason for the dismissal is the TUPE transfer, unless there is an economic, technical or organisational reason entailing changes in the workforce (ETO reason)
||Changes in the location of the workforce following a TUPE transfer fall within the scope of an ETO reason, which prevents genuine place of work redundancies from being automatically unfair.
||The GB commission does not apply and a change in location on its own is not enough to amount to an ETO reason.|
|Micro business (employers with less than 10 employees and no union or elected representatives) consultation
||These businesses can inform and consult directly with their employees rather than through employee representatives.
||No such exception applies in NI meaning that, strictly, all employers have to comply with their information and consultation obligations with their union/elected representatives. In practice, some small employers invite the employees to agree that they will all be representatives and all consulted together.
|Changing terms and conditions (generally, post-transfer changes are void if the sole or principal reason for the changes is the transfer (and in NI, a reason connected with the transfer) unless there is an ETO reason for the change)
Changing the place employees are employed is permitted (this falls with an ETO reason).
Changes to terms incorporated from a collective agreement are permitted where:
|Changes in terms and conditions where the reason is connected with TUPE may be void - that is treated as never having happened - with no specific time limit, so this can apply even some years later.
|Collective agreements||If the transferee is not a participant in the collective bargaining then terms agreed after the transfer do not apply to it.
||While the provision does not apply in NI, the practical position from case-law is essentially the same.
|Service provision change
||For there to be a service provision change, the activities carried on after the change in service provision must be "fundamentally or essentially the same" as those carried on before it.
||While this does not apply in NI, the position is essentially the same, based on pre 2014 case-law.
Overall, these differences mean a transfer of an undertaking or service provision change is potentially more onerous on NI businesses. In particular, not being able to start the minimum time period for collective redundancy consultation pre-transfer in NI can be a real issue and potential cost for employers, particularly in service provision change transfers. Also, not being able to make the permitted GB changes to terms and conditions of employment can be a problem and should be handled carefully. While the micro-business exemption to elect representatives doesn’t apply, employers in NI may be able to get around this if employees decide to elect everyone as representatives, or by having a quick election.
Businesses operating in both jurisdictions should bear in mind the key differences in the TUPE legislation and remain vigilant to the fact that future changes to TUPE in GB are unlikely to apply in NI.