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Reform to service provision changes in TUPE

Among the hottest debates around the recent TUPE reforms was on the future of service provision changes (SPCs).

TUPE and service provision changes

Services such as cleaning, catering or IT support are often contracted out by businesses to specialist providers.

Changing the provision of these services by outsourcing, re-tendering or bringing them back in-house are likely to be considered transfers under TUPE regulations - when they are known as 'service provision changes'.

Having proposed to repeal SPC rules, the Government decided after consultation that doing so would reintroduce 'uncertainty' into the labour market. It said firms would find it difficult to predict when TUPE would apply to changes.

Consequently, SPC rules have been kept as they were - except for one amendment to reflect developments in case law.

Service provision changes amendment

The amendment concerns one of the key tests of whether a change in service provider is covered by TUPE, namely the similarity of the activities being carried out before and after the transfer.

According to the amendment, TUPE is likely to apply if the activities are 'fundamentally the same as the activities carried out by the person who has ceased to carry them out'.

Guidance from BIS pointed out that it didn't necessarily follow that any new or different service activities would automatically be exempt from TUPE. In the end, it would be up to an employment tribunal to decide 'by question of fact and degree', it said.

The amendment applies to transfers made on or after 31 January 2014.

Acas publications and services

Acas has published pdf  TUPE changes 2014 [161kb] which covers everything you need to know about the recent TUPE reforms, including the SPC amendment.

In the coming weeks, Acas will be following this up with a full guide on TUPE and how to manage the process effectively.

You can get free support and advice on TUPE and a range of employment relations issues through the Acas Helpline on 0300 123 1100.

Dedicated Acas training is available on TUPE, including the impact of the reforms, Redundancy and how to understand your options and obligations, and Contracts and terms and conditions.

Visit the Acas Training and Business Solutions area for more information.


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