TUPE reforms may hamper business recovery
Failing businesses could be even harder to rescue because of proposed changes to laws affecting the transfer of employees from one company to another, according to insolvency practitioners.
Link: Government pushes TUPE reform
Reforms are set to make TUPE regulations – rules which govern the treatment of employees when a business is sold as a going concern – more stringent because they will expand employers’ responsbilities to include contract workers.
Although the new reforms are designed to improve the way TUPE operates, R3 said it could have more negative consequences.
Vice-president John Verrill said the likelihood that business rescue will be improved will be ‘overwhelmed by the impact of extending TUPE protection to the army of people working as independent contractors, who are presently treated as self-employed.’
‘The UK’s competitiveness has been enhanced in recent years by the enormous flexibility of its’ labour force. The ability to engage part-time workers without assuming the huge burden attached to a full-blown contract of employment has been a mainstay of the economy and UK business as a whole needs to campaign strongly to ensure that this particular government initiative is stillborn.’
The new reforms are designed to ‘take the fear out of transfer,’ according to trade and industry secretary Patricia Hewitt.
Hewitt said she would be carrying out a public consultation on the proposed TUPE reforms ‘in the first half of this year’.