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STATUTORY INSTRUMENTS


2006 No. 246

TERMS AND CONDITIONS OF EMPLOYMENT

The Transfer of Undertakings (Protection of Employment) Regulations 2006

  Made 6th February 2006 
  Laid before Parliament 7th February 2006 
  Coming into force 6th April 2006 

The Secretary of State makes the following Regulations in exercise of the powers conferred upon him by section 2(2) of the European Communities Act 1972[1] (being a Minister designated for the purposes of that section in relation to rights and obligations relating to employers and employees on the transfer or merger of undertakings, businesses or parts of businesses[2]) and section 38 of the Employment Relations Act 1999[3].

Citation, commencement and extent
     1. —(1) These Regulations may be cited as the Transfer of Undertakings (Protection of Employment) Regulations 2006.

    (2) These Regulations shall come into force on 6 April 2006.

    (3) These Regulations shall extend to Northern Ireland, except where otherwise provided.

Interpretation
     2. —(1) In these Regulations—

    (2) For the purposes of these Regulations the representative of a trade union recognised by an employer is an official or other person authorised to carry on collective bargaining with that employer by that trade union.

    (3) In the application of these Regulations to Northern Ireland the Regulations shall have effect as set out in Schedule 1.

A relevant transfer />      3. —(1) These Regulations apply to—

    (2) In this regulation "economic entity" means an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.

    (3) The conditions referred to in paragraph (1)(b) are that—

    (4) Subject to paragraph (1), these Regulations apply to—

    (5) An administrative reorganisation of public administrative authorities or the transfer of administrative functions between public administrative authorities is not a relevant transfer. />
    (6) A relevant transfer— />

    (7) Where, in consequence (whether directly or indirectly) of the transfer of an undertaking, business or part of an undertaking or business which was situated immediately before the transfer in the United Kingdom, a ship within the meaning of the Merchant Shipping Act 1995[9] registered in the United Kingdom ceases to be so registered, these Regulations shall not affect the right conferred by section 29 of that Act (right of seamen to be discharged when ship ceases to be registered in the United Kingdom) on a seaman employed in the ship.

Effect of relevant transfer on contracts of employment
     4. —(1) Except where objection is made under paragraph (7), a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to the relevant transfer, which would otherwise be terminated by the transfer, but any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee. />
    (2) Without prejudice to paragraph (1), but subject to paragraph (6), and regulations 8 and 15(9), on the completion of a relevant transfer— />

    (3) Any reference in paragraph (1) to a person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to a relevant transfer, is a reference to a person so employed immediately before the transfer, or who would have been so employed if he had not been dismissed in the circumstances described in regulation 7(1), including, where the transfer is effected by a series of two or more transactions, a person so employed and assigned or who would have been so employed and assigned immediately before any of those transactions.

    (4) Subject to regulation 9, in respect of a contract of employment that is, or will be, transferred by paragraph (1), any purported variation of the contract shall be void if the sole or principal reason for the variation is—

    (5) Paragraph (4) shall not prevent the employer and his employee, whose contract of employment is, or will be, transferred by paragraph (1), from agreeing a variation of that contract if the sole or principal reason for the variation is—

    (6) Paragraph (2) shall not transfer or otherwise affect the liability of any person to be prosecuted for, convicted of and sentenced for any offence.

    (7) Paragraphs (1) and (2) shall not operate to transfer the contract of employment and the rights, powers, duties and liabilities under or in connection with it of an employee who informs the transferor or the transferee that he objects to becoming employed by the transferee. />
    (8) Subject to paragraphs (9) and (11), where an employee so objects, the relevant transfer shall operate so as to terminate his contract of employment with the transferor but he shall not be treated, for any purpose, as having been dismissed by the transferor. />
    (9) Subject to regulation 9, where a relevant transfer involves or would involve a substantial change in working conditions to the material detriment of a person whose contract of employment is or would be transferred under paragraph (1), such an employee may treat the contract of employment as having been terminated, and the employee shall be treated for any purpose as having been dismissed by the employer.

    (10) No damages shall be payable by an employer as a result of a dismissal falling within paragraph (9) in respect of any failure by the employer to pay wages to an employee in respect of a notice period which the employee has failed to work.

    (11) Paragraphs (1), (7), (8) and (9) are without prejudice to any right of an employee arising apart from these Regulations to terminate his contract of employment without notice in acceptance of a repudiatory breach of contract by his employer.

Effect of relevant transfer on collective agreements
     5. Where at the time of a relevant transfer there exists a collective agreement made by or on behalf of the transferor with a trade union recognised by the transferor in respect of any employee whose contract of employment is preserved by regulation 4(1) above, then—

Effect of relevant transfer on trade union recognition
     6. —(1) This regulation applies where after a relevant transfer the transferred organised grouping of resources or employees maintains an identity distinct from the remainder of the transferee's undertaking. />
    (2) Where before such a transfer an independent trade union is recognised to any extent by the transferor in respect of employees of any description who in consequence of the transfer become employees of the transferee, then, after the transfer— />

Dismissal of employee because of relevant transfer />      7. —(1) Where either before or after a relevant transfer, any employee of the transferor or transferee is dismissed, that employee shall be treated for the purposes of Part X of the 1996 Act (unfair dismissal) as unfairly dismissed if the sole or principal reason for his dismissal is—

    (2) This paragraph applies where the sole or principal reason for the dismissal is a reason connected with the transfer that is an economic, technical or organisational reason entailing changes in the workforce of either the transferor or the transferee before or after a relevant transfer. />
    (3) Where paragraph (2) applies—

    (4) The provisions of this regulation apply irrespective of whether the employee in question is assigned to the organised grouping of resources or employees that is, or will be, transferred. />
    (5) Paragraph (1) shall not apply in relation to the dismissal of any employee which was required by reason of the application of section 5 of the Aliens Restriction (Amendment) Act 1919[10] to his employment.

    (6) Paragraph (1) shall not apply in relation to a dismissal of an employee if the application of section 94 of the 1996 Act to the dismissal of the employee is excluded by or under any provision of the 1996 Act, the 1996 Tribunals Act or the 1992 Act.

Insolvency
     8. —(1) If at the time of a relevant transfer the transferor is subject to relevant insolvency proceedings paragraphs (2) to (6) apply.

    (2) In this regulation "relevant employee" means an employee of the transferor— />

    (3) The relevant statutory scheme specified in paragraph (4)(b) (including that sub-paragraph as applied by paragraph 5 of Schedule 1) shall apply in the case of a relevant employee irrespective of the fact that the qualifying requirement that the employee's employment has been terminated is not met and for those purposes the date of the transfer shall be treated as the date of the termination and the transferor shall be treated as the employer.

    (4) In this regulation the "relevant statutory schemes" are—

    (5) Regulation 4 shall not operate to transfer liability for the sums payable to the relevant employee under the relevant statutory schemes.

    (6) In this regulation "relevant insolvency proceedings" means insolvency proceedings which have been opened in relation to the transferor not with a view to the liquidation of the assets of the transferor and which are under the supervision of an insolvency practitioner.

    (7) Regulations 4 and 7 do not apply to any relevant transfer where the transferor is the subject of bankruptcy proceedings or any analogous insolvency proceedings which have been instituted with a view to the liquidation of the assets of the transferor and are under the supervision of an insolvency practitioner.

Variations of contract where transferors are subject to relevant insolvency proceedings
     9. —(1) If at the time of a relevant transfer the transferor is subject to relevant insolvency proceedings these Regulations shall not prevent the transferor or transferee (or an insolvency practitioner) and appropriate representatives of assigned employees agreeing to permitted variations.

    (2) For the purposes of this regulation "appropriate representatives" are—

    (3) An individual may be an appropriate representative for the purposes of both this regulation and regulation 13 provided that where the representative is not a trade union representative he is either elected by or has authority from assigned employees (within the meaning of this regulation) and affected employees (as described in regulation 13(1)).

    (4) In section 168 of the 1992 Act (time off for carrying out trade union duties) in subsection (1), after paragraph (c) there is inserted—

    (5) Where assigned employees are represented by non-trade union representatives—

    (6) A permitted variation shall take effect as a term or condition of the assigned employee's contract of employment in place, where relevant, of any term or condition which it varies.

    (7) In this regulation—

Pensions
     10. —(1) Regulations 4 and 5 shall not apply—

    (2) For the purposes of paragraphs (1) and (3), any provisions of an occupational pension scheme which do not relate to benefits for old age, invalidity or survivors shall not be treated as being part of the scheme.

    (3) An employee whose contract of employment is transferred in the circumstances described in regulation 4(1) shall not be entitled to bring a claim against the transferor for—

arising out of a loss or reduction in his rights under an occupational pension scheme in consequence of the transfer, save insofar as the alleged breach of contract or dismissal (as the case may be) occurred prior to the date on which these Regulations took effect.

Notification of Employee Liability Information
     11. —(1) The transferor shall notify to the transferee the employee liability information of any person employed by him who is assigned to the organised grouping of resources or employees that is the subject of a relevant transfer

    (2) In this regulation and in regulation 12 "employee liability information" means—

    (3) Employee liability information shall contain information as at a specified date not more than fourteen days before the date on which the information is notified to the transferee. />
    (4) The duty to provide employee liability information in paragraph (1) shall include a duty to provide employee liability information of any person who would have been employed by the transferor and assigned to the organised grouping of resources or employees that is the subject of a relevant transfer immediately before the transfer if he had not been dismissed in the circumstances described in regulation 7(1), including, where the transfer is effected by a series of two or more transactions, a person so employed and assigned or who would have been so employed and assigned immediately before any of those transactions.

    (5) Following notification of the employee liability information in accordance with this regulation, the transferor shall notify the transferee in writing of any change in the employee liability information.

    (6) A notification under this regulation shall be given not less than fourteen days before the relevant transfer or, if special circumstances make this not reasonably practicable, as soon as reasonably practicable thereafter.

    (7) A notification under this regulation may be given—

Remedy for failure to notify employee liability information
     12. —(1) On or after a relevant transfer, the transferee may present a complaint to an employment tribunal that the transferor has failed to comply with any provision of regulation 11.

    (2) An employment tribunal shall not consider a complaint under this regulation unless it is presented—

    (3) Where an employment tribunal finds a complaint under paragraph (1) well-founded, the tribunal—

    (4) The amount of the compensation shall be such as the tribunal considers just and equitable in all the circumstances, subject to paragraph (5), having particular regard to—

    (5) Subject to paragraph (6), the amount of compensation awarded under paragraph (3) shall be not less than £500 per employee in respect of whom the transferor has failed to comply with a provision of regulation 11, unless the tribunal considers it just and equitable, in all the circumstances, to award a lesser sum.

    (6) In ascertaining the loss referred to in paragraph (4)(a) the tribunal shall apply the same rule concerning the duty of a person to mitigate his loss as applies to any damages recoverable under the common law of England and Wales, Northern Ireland or Scotland, as applicable.

    (7) Section 18 of the 1996 Tribunals Act (conciliation) shall apply to the right conferred by this regulation and to proceedings under this regulation as it applies to the rights conferred by that Act and the employment tribunal proceedings mentioned in that Act.

Duty to inform and consult representatives
     13. —(1) In this regulation and regulations 14 and 15 references to affected employees, in relation to a relevant transfer, are to any employees of the transferor or the transferee (whether or not assigned to the organised grouping of resources or employees that is the subject of a relevant transfer) who may be affected by the transfer or may be affected by measures taken in connection with it; and references to the employer shall be construed accordingly.

    (2) Long enough before a relevant transfer to enable the employer of any affected employees to consult the appropriate representatives of any affected employees, the employer shall inform those representatives of—

    (3) For the purposes of this regulation the appropriate representatives of any affected employees are—

    (4) The transferee shall give the transferor such information at such a time as will enable the transferor to perform the duty imposed on him by virtue of paragraph (2)(d).

    (5) The information which is to be given to the appropriate representatives shall be given to each of them by being delivered to them, or sent by post to an address notified by them to the employer, or (in the case of representatives of a trade union) sent by post to the trade union at the address of its head or main office.

    (6) An employer of an affected employee who envisages that he will take measures in relation to an affected employee, in connection with the relevant transfer, shall consult the appropriate representatives of that employee with a view to seeking their agreement to the intended measures.

    (7) In the course of those consultations the employer shall—

    (8) The employer shall allow the appropriate representatives access to any affected employees and shall afford to those representatives such accommodation and other facilities as may be appropriate.

    (9) If in any case there are special circumstances which render it not reasonably practicable for an employer to perform a duty imposed on him by any of paragraphs (2) to (7), he shall take all such steps towards performing that duty as are reasonably practicable in the circumstances.

    (10) Where—

the employer shall be treated as complying with the requirements of this regulation in relation to those employees if he complies with those requirements as soon as is reasonably practicable after the election of the representatives.

    (11) If, after the employer has invited any affected employees to elect representatives, they fail to do so within a reasonable time, he shall give to any affected employees the information set out in paragraph (2).

    (12) The duties imposed on an employer by this regulation shall apply irrespective of whether the decision resulting in the relevant transfer is taken by the employer or a person controlling the employer.

Election of employee representatives
     14. —(1) The requirements for the election of employee representatives under regulation 13(3) are that—

    (2) Where, after an election of employee representatives satisfying the requirements of paragraph (1) has been held, one of those elected ceases to act as an employee representative and as a result any affected employees are no longer represented, those employees shall elect another representative by an election satisfying the requirements of paragraph (1)(a), (e), (f) and (i).

Failure to inform or consult
    
15. —(1) Where an employer has failed to comply with a requirement of regulation 13 or regulation 14, a complaint may be presented to an employment tribunal on that ground—

    (2) If on a complaint under paragraph (1) a question arises whether or not it was reasonably practicable for an employer to perform a particular duty or as to what steps he took towards performing it, it shall be for him to show—

    (3) If on a complaint under paragraph (1) a question arises as to whether or not an employee representative was an appropriate representative for the purposes of regulation 13, it shall be for the employer to show that the employee representative had the necessary authority to represent the affected employees.

    (4) On a complaint under paragraph (1)(a) it shall be for the employer to show that the requirements in regulation 14 have been satisfied.

    (5) On a complaint against a
transferor that he had failed to perform the duty imposed upon him by virtue of regulation 13(2)(d) or, so far as relating thereto, regulation 13(9), he may not show that it was not reasonably practicable for him to perform the duty in question for the reason that the transferee had failed to give him the requisite information at the requisite time in accordance with regulation 13(4) unless he gives the transferee notice of his intention to show that fact; and the giving of the notice shall make the transferee a party to the proceedings.

    (6) In relation to any complaint under paragraph (1), a failure on the part of a person controlling (directly or indirectly) the employer to provide information to the employer shall not constitute special circumstances rendering it not reasonably practicable for the employer to comply with such a requirement.

    (7) Where the tribunal finds a complaint against a transferee under paragraph (1) well-founded it shall make a declaration to that effect and may order the transferee to pay appropriate compensation to such descriptions of affected employees as may be specified in the award.

    (8) Where the tribunal finds a complaint against a transferor under paragraph (1) well-founded it shall make a declaration to that effect and may—

    (9) The transferee shall be jointly and severally liable with the transferor in respect of compensation payable under sub-paragraph (8)(a) or paragraph (11).

    (10) An employee may present a complaint to an employment tribunal on the ground that he is an employee of a description to which an order under paragraph (7) or (8) relates and that—

    (11) Where the tribunal finds a complaint under paragraph (10) well-founded it shall order the transferor or transferee as applicable to pay the complainant the amount of compensation which it finds is due to him.

    (12) An employment tribunal shall not consider a complaint under paragraph (1) or (10) unless it is presented to the tribunal before the end of the period of three months beginning with—

or within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of the period of three months.

Failure to inform or consult: supplemental
     16. —(1) Section 205(1) of the 1996 Act (complaint to be sole remedy for breach of relevant rights) and section 18 of the 1996 Tribunals Act (conciliation) shall apply to the rights conferred by regulation 15 and to proceedings under this regulation as they apply to the rights conferred by those Acts and the employment tribunal proceedings mentioned in those Acts.

    (2) An appeal shall lie and shall lie only to the Employment Appeal Tribunal on a question of law arising from any decision of, or arising in any proceedings before, an employment tribunal under or by virtue of these Regulations; and section 11(1) of the Tribunals and Inquiries Act 1992[
13] (appeals from certain tribunals to the High Court) shall not apply in relation to any such proceedings.

    (3) "Appropriate compensation" in regulation 15 means such sum not exceeding thirteen weeks' pay for the employee in question as the tribunal considers just and equitable having regard to the seriousness of the failure of the employer to comply with his duty.

    (4) Sections 220 to 228 of the 1996 Act shall apply for calculating the amount of a week's pay for any employee for the purposes of paragraph (3) and, for the purposes of that calculation, the calculation date shall be—

Employers' Liability Compulsory Insurance
     17. —(1) Paragraph (2) applies where—

    (2) Where this paragraph applies, on completion of a relevant transfer the transferor and the transferee shall be jointly and severally liable in respect of any liability referred to in section 1(1) of the 1969 Act, in so far as such liability relates to the employee's employment with the transferor. />
Restriction on contracting out
     18. Section 203 of the 1996 Act (restrictions on contracting out) shall apply in relation to these Regulations as if they were contained in that Act, save for that section shall not apply in so far as these Regulations provide for an agreement (whether a contract of employment or not) to exclude or limit the operation of these Regulations.

Amendment to the 1996 Act
    
19. In section 104 of the 1996 Act (assertion of statutory right) in subsection (4)—

Repeals, revocations and amendments
     20. —(1) Subject to regulation 21, the 1981 Regulations are revoked.

    (2) Section 33 of, and paragraph 4 of Schedule 9 to, the Trade Union Reform and Employment Rights Act 1993[
15] are repealed.

    (3) Schedule 2 (consequential amendments) shall have effect.

Transitional provisions and savings
     21. —(1) These Regulations shall apply in relation to—

    (2) The 1981 Regulations shall continue to apply in relation to—

    (3) In respect of a relevant transfer that takes place on or after 6 April 2006, any action taken by a transferor or transferee to discharge a duty that applied to them under regulation 10 or 10A of the 1981 Regulations shall be deemed to satisfy the corresponding obligation imposed by regulations 13 and 14 of these Regulations, insofar as that action would have discharged those obligations had the action taken place on or after 6 April 2006.

    (4) The duty on a transferor to provide a transferee with employee liability information shall not apply in the case of a relevant transfer that takes place on or before 19 April 2006.

    (5) Regulations 13, 14, 15 and 16 shall not apply in the case of a service provision change that is not also a transfer of an undertaking, business or part of an undertaking or business that takes place on or before 4 May 2006.

    (6) The repeal of paragraph 4 of Schedule 9 to the Trade Union Reform and Employment Rights Act 1993 does not affect the continued operation of that paragraph so far as it remains capable of having effect.


Gerry Sutcliffe
Parliamentary Under Secretary of State for Employment Relations and Consumer Affairs Department of Trade and Industry

6th February 2006



SCHEDULE 1
Regulation 2


APPLICATION OF THE REGULATIONS TO NORTHERN IRELAND


     1. These Regulations shall apply to Northern Ireland, subject to the modifications in this Schedule.

     2. Sub-paragraph (1)(b) of regulation 3 and any other provision of these Regulations insofar as it relates to that sub-paragraph shall not apply to Northern Ireland.

     3. Any reference in these Regulations—

    (a) to an employment tribunal shall be construed as a reference to an Industrial Tribunal; and

    (b) to the Employment Appeal Tribunal shall be construed as a reference to the Court of Appeal.

     4. For the words from "Paragraph (1)" to "the 1992 Act" in regulation 7(6) there is substituted—

     5. For the words from "In this Regulation" to "Part XII of the 1996 Act" in regulation 8(4) there is substituted—

      " In this Regulation the "relevant statutory schemes" are—

      (a) Chapter VI of Part XII of the Employment Rights (Northern Ireland) Order 1996 ("the 1996 Order");

      (b) Part XIV of the 1996 Order".

     6. For paragraph (4) of regulation 9 there is substituted—

      " In article 92 of the 1996 Order (time off for carrying out trade union duties) in paragraph (1), for the full stop at the end of sub-subparagraph (c) there is inserted—

        " (d) negotiations with a view to entering into an agreement under regulation 9 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 that applies to employees of the employer, or

        (e) the performance on behalf of employees of the employer of functions related to or connected with the making of an agreement under that regulation."."

         7. For the words from "Paragraph (2)" to "the employee's employment with the transferor" in regulation 17 there is substituted—

        " Paragraph (2) applies where—

        (a) by virtue of article 7(a), 7(aa) or 7(b) of the Employers' Liability (Defective Equipment and Compulsory Insurance) (Northern Ireland) Order 1972[20] ("the 1972 Order"), the transferor is not required by that Order to effect any insurance; or

        (b) by virtue of article 7(c) of the 1972 Order, the transferor is exempted from the requirement of that Order to effect insurance.

          (2) Where this paragraph applies, on completion of a relevant transfer the transferor and the transferee shall be jointly and severally liable in respect of any liability referred to in article 5(1) of the 1972 Order, in so far as such liability relates to the employee's employment with the transferor". />

         8. In regulation 2 for "the 1992 Act" there is substituted "the Industrial Relations (Northern Ireland) Order 1992" and for "Part XIII of the Insolvency Act 1986" there is substituted "Part XII of the Insolvency (NI) Order 1989[21]".

         9. In regulation 5 for "sections 179 and 180 of the 1992 Act" there is substituted "Article 26 of the Industrial Relations (NI) Order 1992 No.807 (N.I. 5)".

         10. —(1) In regulation 10 for "the Pensions Schemes Act 1993" there is substituted "the Social Security Pensions (Northern Ireland) Order 1975[22]".

        (2) In regulation 11 for "the Employment Act 2002 (Dispute Resolution) Regulations 2004" there is substituted "the Employment (Northern Ireland) Order 2003 (Dispute Resolution) Regulations (NI) 2004[23]".

        (3) In regulation 12 for “ "Section 18 of the 1996 Tribunals Act" there is substituted "Article 20 of the Industrial Tribunals (NI) Order 1996 No.1921 (NI 18)".

        (4) In regulation 16—

      (a) for "Section 18 of the 1996 Tribunals Act" there is substituted "Article 20 of the Industrial Tribunals (NI) Order 1996 No.1921 (NI 18)"; and

      (b) for any reference to "those Acts" there is substituted a reference to "those Orders".

         11. For a reference to a provision of the 1996 Act in column one of Table 1 there is substituted the corresponding reference to the Employment Rights (Northern Ireland) Order 1996 in column two of Table 1—


    Table 1
    Column 1 Column 2
    Provision of the Employment Rights Act 1996 Equivalent Provision in the Employment Rights (Northern Ireland) Order 1996
    Part X Part XI
    Section 98(4) Article 130(4)
    Section 98(1) Article 130(1)
    Section 135 Article 170(I)
    Section 98(2)(c) Article 130(2)(c)
    Section 95(1)(c) Article 127(1)(c)
    Section 1 Article 33
    Section 205(1) Article 247(I)
    Sections 220-228 Articles 16-24
    Section 139 Article 174
    Section 155 Article 190
    Section 95(1) Article 127(1)
    Section 95(2) Article 127(2)
    Section 97 Article 129
    Section 203 Article 245
    Section 104 Article 135

         12. Any expression used in this Schedule which is defined in the Interpretation Act (Northern Ireland) 1954[24] shall have the meaning assigned by that Act.



    SCHEDULE 2
    Regulation 20


    CONSEQUENTIAL AMENDMENTS


    References to the 1981 Regulations

         1. In the following provisions, for "
    Transfer of Undertakings (Protection of Employment) Regulations 1981" or "Transfer of Undertakings (Protection of Employment) Regulations 1981 (S.I. 1981/1794)" there is substituted "Transfer of Undertakings (Protection of Employment) Regulations 2006"—

      (a) section 2(2) of the Property Services Agency and Crown Suppliers Act 1990[25];

      (b) paragraph 8 of Schedule 1 to the New Roads and Street Works Act 1991[26];

      (c) paragraph 5 of Schedule 1 to the Ports Act 1991[27];

      (d) section 9(1) of the Export and Investment Guarantees Act 1991[28];

      (e) section 168(1)(c) of the Trade Union and Labour Relations (Consolidation) Act 1992[29];

      (f) paragraph 8 of Schedule 2 to the Roads (Northern Ireland) Order 1993[30];

      (g) paragraph 6 of Schedule 1 to the Ports (Northern Ireland) Order 1994[31];

      (h) section 129(1)(b) of the Education Act 2002[32];

      (i) section 102(8) of the Local Government Act 2003[33];

      (j) sections 3(6)(a) and 32(6)(b) of, and paragraph 12(1) of Schedule 3 to, the Horserace Betting and Olympic Lottery Act 2004[34];

      (k) section 90(4) of the Clean Neighbourhoods and Environment Act 2005[35];

      (l) section 39(5) of the Equality Act 2006.

      Industrial Training Act 1982

         2. —(1) Section 3B of the Industrial Training Act 1982[36] (transfer of staff employed by industrial training boards) is amended as follows.

        (2) In subsection (2), for "Transfer of Undertakings (Protection of Employment) Regulations 1981" there is substituted "Transfer of Undertakings (Protection of Employment) Regulations 2006".

        (3) In subsection (3)(a), for "within the meaning of those Regulations" there is substituted "to which those Regulations apply".

    Ordnance Factories and Military Services Act 1984

         3. —(1) Paragraph 2 of Schedule 2 to the Ordnance Factories and Military Services Act 1984[37] (application of 1981 Regulations to ordnance factories transfer schemes) is amended as follows.

        (2) In sub-paragraph (1), for the words from "for" to the end there is substituted "for a transfer that is a relevant transfer for the purposes of the 2006 regulations".

        (3) In sub-paragraphs (2) and (6), for "1981 regulations", in both places where it occurs, there is substituted "2006 regulations".

        (4) In sub-paragraph (3) for the words from "the 1981 regulations" to the end there is substituted "the 2006 regulations as if, immediately before the appointed day, they were employed in the entity subject to the transfer". />
        (5) In sub-paragraph (4)(b)–

      (a) for "with the undertaking or part" there is substituted "with the entity subject to the transfer", and

      (b) for the words from "the 1981 regulations" to "or part" there is substituted "the 2006 regulations as if he were employed in the entity subject to the transfer". />

        (6) In sub-paragraph (7), for the definition of "the 1981 regulations" there is substituted—

        " "the 2006 regulations" means the Transfer of Undertakings (Protection of Employment) Regulations 2006."

    Dockyard Services Act 1986

         4. —(1) Section 1 of the Dockyard Services Act 1986[38] (transfer of persons engaged in dockyard services) is amended as follows.

        (2) In subsection (4)–

      (a) for the words from the beginning to "Regulations 1981" there is substituted "The Transfer of Undertakings (Protection of Employment) Regulations 2006",

      (b) for the words from "an undertaking" to "those Regulations" there is substituted "an undertaking to whose transfer those Regulations apply", and

      (c) for the words from "a part" to "a business" there is substituted "a part of that undertaking to whose transfer those Regulations apply".

        (3) In subsection (5)–

      (a) for the words from the beginning to "Regulations 1981" there is substituted "The Transfer of Undertakings (Protection of Employment) Regulations 2006",

      (b) for "regulation 10", in both places where it occurs, there is substituted "regulation 13", and

      (c) for "regulation 11" there is substituted "regulations 15 and 16".

      Dartford-Thurrock Crossing Act 1988

         5. —(1) Schedule 5 to the Dartford-Thurrock Crossing Act 1988[39] (transfers of staff) is amended as follows.

        (2) In paragraphs 3(1) and 4, for "the Employment Transfer Regulations", in both places where it occurs, there is substituted "the Transfer of Undertakings (Protection of Employment) Regulations 2006".

        (3) In paragraph 4, for "Regulation 7" there is substituted "Regulation 10".

        (4) In paragraph 6—

      (a) in sub-paragraph (2), for "this Schedule", in both places where it occurs, there is substituted "Part 1 of this Schedule", and

      (b) after that sub-paragraph there is inserted—

          " (3) Expressions used in Part 2 of this Schedule to which a meaning is given by the Transfer of Undertakings (Protection of Employment) Regulations 2006 have the same meaning in Part 2 of this Schedule."

    Atomic Weapons Establishment Act 1991

         6. —(1) Section 2 of the Atomic Weapons Establishment Act 1991[40] (provisions applying to the transfer of certain employees) is amended as follows.

        (2) In subsection (1)—

      (a) for the words from the beginning to "Regulations 1981" there is substituted "The Transfer of Undertakings (Protection of Employment) Regulations 2006", and

      (b) for the words from "an undertaking" to "those Regulations" there is substituted "an undertaking to whose transfer those Regulations apply".

        (3) In subsection (2), for the words from "a part" to "a business" there is substituted "a part of that undertaking to whose transfer those Regulations apply".

    Railways Act 1993

         7. In section 151 of the Railways Act 1993[41] (general interpretation), in subsection (6), for the words from "the Transfer" to the end there is substituted "the Transfer of Undertakings (Protection of Employment) Regulations 2006, in their application in relation to a relevant transfer within the meaning of those regulations".

    Employment Tribunals Act 1996

         8. In section 4 of the Employment Tribunals Act 1996[42] (composition of a tribunal), in subsection (3)(ca), for the words from "regulation 11(5)" to "Regulations 1981" there is substituted "regulation 15(10) of the Transfer of Undertakings (Protection of Employment) Regulations 2006".

    Industrial Tribunals (Northern Ireland) Order 1996

         9. In Article 6 of the Industrial Tribunals (Northern Ireland) Order 1996[43] (composition of a tribunal), in paragraph (3)(ab), for the words from "regulation 11(5)" to "Regulations 1981" there is substituted "regulation 15(10) of the Transfer of Undertakings (Protection of Employment) Regulations 2006".

    Employment Rights Act 1996

         10. In each of the following provisions of the Employment Rights Act 1996[44], for the words from "Regulations 10" to "Regulations 1981" there is substituted "regulations 9, 13 and 15 of the Transfer of Undertakings (Protection of Employment) Regulations 2006"—

      (a) section 47(1)(a) and (1A);

      (b) section 61(1)(a);

      (c) section 103(1)(a) and (2).

      Employment Rights (Northern Ireland) Order 1996

         11. In each of the following provisions of the Employment Rights (Northern Ireland) Order 1996[45] for the words from "Regulations 10" to "Regulations 1981" there is substituted "regulations 9, 13 and 15 of the Transfer of Undertakings (Protection of Employment) Regulations 2006"—

      (a) Article 70(1)(a) and (1A);

      (b) Article 89(1)(a);

      (c) Article 134(1)(a) and (2).

      Income Tax (Earnings and Pensions) Act 2003

         12. —(1) The Income Tax (Earnings and Pensions) Act 2003[46] is amended as follows.

        (2) In section 498 (no charge on shares ceasing to be subject to share incentive plan in certain circumstances), in subsection (2)(c), for the words from "a transfer" to the end there is substituted "a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006".

        (3) In Schedule 2 (approved share incentive plans), in paragraph 32(2)(c), for the words from "a transfer" to the end there is substituted "a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006".

    Pensions Act 2004

         13. —(1) Section 257 of the Pensions Act 2004[47] (conditions for pension protection) is amended as follows.

        (2) In subsection (1), for paragraph (a) there is substituted—

        " (a) there is a relevant transfer within the meaning of the TUPE regulations,".

        (3) Subsection (6) is omitted.

        (4) In subsection (8), in the definition of the "TUPE Regulations", for the words from "Transfer" to the end there is substituted "Transfer of Undertakings (Protection of Employment) Regulations 2006".

    Energy Act 2004

         14. —(1) Paragraph 10 of Schedule 5 to the Energy Act 2004[48] (supplementary provisions about nuclear transfer schemes) is amended as follows.

        (2) In sub-paragraphs (1), (2) and (3), in each place where it occurs, for "1981 regulations" there is substituted "2006 regulations".

        (3) In sub-paragraph (1)—

        (4) After sub-paragraph (1), there is inserted—

          " (1A) The 2006 regulations apply to a service provision change—

        (a) in accordance with a nuclear transfer scheme, or

        (b) in accordance with a modification agreement,

      as if (in so far as that would not otherwise be the case) the references in those regulations to the transferor were references to the person by whom the activities affected by the service provision change were carried out immediately before the coming into force of the service provision change."

        (5) In sub-paragraph (2), after "a transfer" there is inserted "(or service provision change)".

        (6) In sub-paragraph (3), after "transfer", in both places where it occurs, there is inserted "(or service provision change)".

        (7) In sub-paragraph (4), for the definition of "undertaking" there is substituted—

        " references to a service provision change are references to a service provision change falling within regulation 3(1)(b) of the 2006 regulations."



    EXPLANATORY NOTE

    (This note is not part of the Regulations)


    These Regulations implement Council Directive 2001/23/EC ("the Directive") on the approximation of the law relating to business
    transfers. They revoke the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("the 1981 Regulations"). The provisions introduced by these regulations are similar to those included in the 1981 Regulations. They also include provisions taking advantage of certain policy options conferred by the Directive.

    To the extent that the Regulations implement the Directive, they are made under section 2(2) of the European Communities Act 1972. To the extent that they relate to the treatment of employees, and related matters, in relation to a service provision change (in circumstances other than those to which the Directive applies), they are made under section 38 of the Employment Relations Act 1999 ("the 1999 Act").

    These Regulations apply to the UK. However to the extent that they are made under section 38 of the 1999 Act they do not apply to Northern Ireland (paragraph 2 of Schedule 1).

    The Regulations make provision for the treatment of employees, and related matters, on the transfer of an undertaking or business or a service provision change.

    The principal provisions of the Regulations provide as follows—

        (1) Regulation 3 defines a transfer to which these Regulations apply (described as a relevant transfer). The two categories of relevant transfer (which are not mutually exclusive) are the transfer of an undertaking or business to another person and a service provision change.

        (2) Regulation 4 provides that a relevant transfer shall not operate to terminate the contract of employment of a person employed by the transferor and assigned to the organised grouping of resources or employees subject to a relevant transfer but that any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee. The transferor's powers, duties, rights and liabilities under or in connection with that employment contract shall transfer to the transferee. A variation to that employment contract by reason of the transfer is prohibited but that shall not prevent the employer and his employee from agreeing a variation to the contract for a reason unconnected with the transfer or a reason connected with the transfer that is an economic, technical or organisational reason entailing changes in the workforce.

        (3) Regulation 5 provides that a collective agreement made by a transferor with a recognised trade union shall, after the transfer, have effect as if made by the transferee with that trade union. Regulation 6 provides for the transfer of recognition of an independent trade union.

        (4) Regulation 7 provides that the dismissal of an employee by reason of the transfer is unlawful but that a dismissal for a reason connected with the transfer that is an economic technical or organisational reason entailing changes in the workforce is potentially lawful.

        (5) Regulation 8 applies where, at the time of the transfer, the transferor is subject to relevant insolvency proceedings, as defined in regulation 8(6). It provides that certain of an employer's pre-existing debts to employees do not pass to the transferee but are instead met by the National Insurance Fund.

        (6) Regulation 9 provides greater scope for the transferee to vary, subject to certain requirements, the terms and conditions of employment of transferring employees in circumstances where the transferor is subject to relevant insolvency proceedings.

        (7) Regulation 10 provides that regulations 4 and 5 shall not apply to so much of a contract of employment or collective agreement as relates to any provision of an occupational pension scheme relating to old age, survivors or invalidity benefits.

        (8) Regulation 11 provides that the transferor shall provide employee liability information in respect of employees assigned to the organised grouping of resources or employees that is subject to a relevant transfer to the transferee in advance of a relevant transfer. />
        (9) Regulation 12 provides a remedy to a transferee for the failure of a transferor to comply with regulation 11.

        (10) Regulation 13 imposes a duty on an employer to provide information to appropriate representatives of affected employees about a relevant transfer and measures he envisages taking in respect of it, long enough before a relevant transfer to enable the employer to consult those representatives with a view to seeking their agreement to the intended measures. Regulation 14 makes provision for the election of employee representatives where there is no recognised independent trade union. Regulations 15 and 16 provide a remedy for a failure of an employer to comply with regulations 13 or 14.

        (11) Regulation 21 provides that these Regulations shall apply to a relevant transfer that takes place on or after 6 April 2006 whilst the 1981 Regulations will apply to a transfer to which the 1981 Regulations applied that took place before 6 April 2006.

        (12) Schedule 1 provides modifications in the application of the Regulations to Northern Ireland.

        (13) Schedule 2 provides amendments consequential on these Regulations.

        (14) A Regulatory Impact Assessment of the effect these Regulations will have on business costs, and Transposition Notes showing how Council Directive 2001/23/EC has been implemented in the United Kingdom are available to the public, free of charge, from the Employment Relations Directorate, TUPE Unit, 3rd Floor, Department of Trade and Industry, 1 Victoria Street, London SW1H 0ET, and from the DTI website on the links shown below. Copies of each have also been placed in both Houses of Parliament.

    http://www.dti.gov.uk/er/individual/tupe_transposition_note_2006.pdf and

    http://www.dti.gov.uk/er/individual/tupe_ria_2006.pdf


    Notes:

    [1] 1972 c.68.back

    [2] See the European Communities (Designation) (No.2) Order 1977 (S.I. 1977/1718).back

    [3] 1999 c.26.back

    [4] 1986 c.45; section 388, which explains the meaning of acting as insolvency practitioner, was amended by the Insolvency Act 2000 (c.39) sections 4(1), 4(2)(a), 4(2)(b), 4(2)(c), the Bankruptcy (Scotland) Act 1993 section 11(1), S.I. 1994/2421, S.I. 2002/1240 and S.I. 2002/2708.back

    [5] 1992 c.52.back

    [6] 1996 c.18.back

    [7] 1996 c.17 ; section 18, which defines conciliation, was amended by the Employment Rights (Dispute Resolution) Act 1998 (c.8) sections 1(2)(a), 11(1), 15 and Schedule 1, the National Minimum Wage Act 1998 (c.39) sections 24 and 30(1), the Employment Act 2002 (c.22) sections 24(2), 53 and Schedule 7, the Employment Relations Act 2004 (c.24) section 57(1) and Schedule 1, S.I. 1998/1833, S.I. 1999/3323, S.I. 2000/1299, S.I. 2000/1551, S.I. 2001/1107, S.I. 2002/2034, S.I. 2003/1660, S.I. 2003/1661, S.I. 2003/1673, S.I. 2003/3049, S.I. 2004/2326, S.I. 2004/1713 and S.I. 2004/3426.back

    [8] S.I. 1981/1794, amended by the Dock Work Act 1989 (c.13) section 7(2), the Trade Union Reform and Employment Rights Act 1993 (c.19) sections 33, 51 and Schedule 10, the Employment Rights (Dispute Resolution) Act 1998 (c.8) section 1(2)(a), S.I. 1987/442. S.I. 1995/2587, S.I. 1998/1658, S.I. 1999/1925 and S.I. 1999/2402.back

    [9] 1995 c.21.back

    [10] 1919 c.92; section 5 was amended by the Former Enemy Aliens (Disabilities Removal) Act 1925 section 1 and Schedule 2, the Merchant Shipping Act 1970 section 100(3) and Schedule 5 and the Merchant Shipping Act 1995 section 314 and Schedule 12.back

    [11] 1993 c.48; section 1, which defines occupational pension scheme, was amended by the Welfare Reform & Pensions Act 1999 (c.30) section 18 and Schedule 2, the Pensions Act 2004 (c.35) section 239 and S.I. 1999/1820.back

    [12] S.I. 2004/752.back

    [13] 1992 c.53; section 11(1) was amended by the Sea Fish (Conservation) Act 1992 (c.60) section 9, the Special Educational Needs and Disability Act 2001 (c.10) section 42(1) and Schedule 8 and S.I. 2001/3649.back

    [14] 1969 c.57.back

    [15] 1993 c.19.back

    [16] S.I. 1996/1919 (N.I. 16).back

    [17] S.I. 1996/1921 (N.I. 18).back

    [18] S.I. 1992/807 (N.I. 5).back

    [19] S.I. 1995/1980 (N.I. 12).back

    [20] S.I. 1992/963 (N.I. 6).back

    [21] S.I. 1989/2405 (N.I. 19).back

    [22] S.I. 1995/1503 (N.I. 15).back

    [23] S.R. 2004 No. 521.back

    [24] 1954 c.33 (N.I).back

    [25] 1990 c.12.back

    [26] 1991 c.22.back

    [27] 1991 c.52.back

    [28] 1991 c.67.back

    [29] 1992 c.52.back

    [30] S.I. 1993/3160 (N.I. 15).back

    [31] S.I. 1994/2809 (N.I. 16).back

    [32] 2002 c.32.back

    [33] 2003 c.26back

    [34] 2004 c.25.back

    [35] 2005 c.16.back

    [36] 1982 c.10.back

    [37] 1984 c.59.back

    [38] 1986 c.52.back

    [39] 1988 c.20.back

    [40] 1991 c.46.back

    [41] 1993 c.43.back

    [42] 1996 c.17.back

    [43] S.I. 1996/1921 (N.I. 18).back

    [44] 1996 c.18.back

    [45] S.I. 1999/1919 (N.I. 16).back

    [46] 2003 c.1.back

    [47] 2004 c.35.back

    [48] 2004 c.20.back



    ISBN 0 11 073992 2


     © Crown copyright 2006

    Prepared 15 February 2006


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