Major changes in employment law, which come into effect next Thursday, are set to help reduce the employment risks in numerous business transfers across Birmingham.
That is the verdict of Peter Duff, partner and head of law firm Shoosmiths' employment team.
Mr Duff said the revised Transfer of Undertakings (Protection of Employment) Regulations - which aid employees by preserving their terms and conditions when a business is sold or transferred from one firm to another - should bring long awaited transparency and benefit all.
"The impact of the TUPE Regulations will vary according to the type of business," he noted. "But, the most wide ranging effect is likely to be in relation to so-called 'service provision changes', for example, on the re-tender of outsourced functions such as catering, security, or cleaning.
"These will now clearly be within the scope of TUPE transfers. Previously the position was not at all certain and this led to disputes between outgoing and incoming employers as to who should bear any employment costs.
"The intention behind the changes to the regulations is to provide more clarity to the different parties to a business sale, acquisition or transfer. It will give them more certainty as to their liabilities in relation to the employees of the business."
Under the changes, a company that previously carried out a contract, such as security services or catering, will also have a duty to pass information about its employees to the new company taking over the contract so it can anticipate the cost of taking on the staff.
This will include details about their age, identity, records of disciplinary action and grievances in the past two years, any collective agreements and information in employment particulars, and any legal action taken or potential actions.
Another significant change to the regulations is that in certain situations employees will be able to agree to switch their terms and conditions - something which isn't possible at the moment. This will be allowed if the change is not connected with the transfer or if the employer has a so-called "economic, technical or organ-isational reason entailing changes in the workforce" -essentially if the only alternative would be to make employees redundant.
"I anticipate that the changes to the TUPE Regulations will have the added benefit of bringing increased speed to the sale, acquisition and transfer of businesses because essential information will need to be provided at the outset," added Mr Duff who specialises in advising corporate clients on both contentious and non-contentious employment law issues.
"When a company is tendering for a contact it will be entitled to ask for answers to questions that will help identify employment liabilities.
"At the moment they can ask for the information but there is no guarantee of its delivery.
"Rather than purchasers sending a list of questions to the seller about the employees and waiting for replies, the seller will have had to put together the necessary information in advance."
The new Regulations update the existing 1981 ones.
