Micro Businesses and TUPE

19 Dec

It has been part of this Government’s policy objectives to try, wherever possible, to exempt micro-businesses from any new domestic regulation until 2014. A micro business is any business employing ten or fewer employees. The Government’s TUPE consultation document in January 2013 asked for comments on a proposal to exempt micro-businesses from a large number of TUPE provisions.

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Micro Business

It has been part of this Government’s policy objectives to try, wherever possible, to exempt micro-businesses from any new domestic regulation until 2014. A micro business is any business employing ten or fewer employees. The Government’s TUPE consultation document in January 2013 asked for comments on a proposal to exempt micro-businesses from a large number of TUPE provisions. The consultation document also contained a proposal to remove the need to elect employee representatives for all businesses.
By the time of the Government’s Response in September 2013 the proposals had been greatly slimmed down with no blanket exemption for small businesses or the election of employee representatives. The Government was particularly worried that a blanket exemption for micro businesses would lead to more legal costs as there would be a two tier regime for TUPE! Instead a limited exemption in respect of micro businesses electing representatives was put forward.
Article 7(5) of the EU Directive on TUPE allows for opt outs from the information and consultation provisions based on the number of employees.  The Government were presented with a number of different potential cut offs: 50 (based on the Information & Consultation Regulations 2004); 20 (based on S 188 TULRA); or 10 (micro-business qualification).
The Government eventually decided that the exemption was only really appropriate for very small businesses and set the level at 10 employees or fewer. This means that for micro businesses there is no longer a requirement to elect representatives. However if there are already representatives (e.g. Trade Unions) then consultation must take place irrespective of the size of the employer. It should also be noted that the need to consult and inform has not been removed altogether, as this still needs to be carried out on an individual basis.
TUPE is changing in 2014 meaning expert advice on the changes is essential. 12CPBarristers can provide you with the assistance you need to guide you through the challenges TUPE can present.

Peter D

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