1. Do you agree with the Government s proposal to repeal the 2006 amendments relating to service provision changes? Yes/No.

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1 FDF s Response to the Consultation Document from the Department for Business, Innovation and Skills on the Proposed Changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 This submission is made by the Food and Drink Federation, the trade association for food and drink manufacturing. Food and drink is the largest manufacturing sector in the UK (accounting for 16% of the total manufacturing sector) turning over 76bn per annum; creating Gross Value Added (GVA) of 20.6bn and employing up to 400,000 people. FDF s response to the questions raised in the Department for Business, Innovation and Skills consultation document on the Proposed Changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 which is set out below is based on consultation with members of FDF s Employment and Skills Forum:- 1. Do you agree with the Government s proposal to repeal the 2006 amendments relating to service provision changes? /No. No a) Please explain your reasons. We recognise that the Government is seeking to remove some gold-plating in the TUPE Regulations arising from the transposition of the Acquired Rights Directive into UK legislation, and that it is doing this in response to general calls from business for less regulation. We therefore appreciate the Government s objective in making this proposal but, in this instance, FDF members have indicated that they would prefer to retain the greater certainty created by the current legislation even if it means that more transactions are brought within the scope of the TUPE Regulations over the uncertainty that would result from removing the service provision category, since some service provision changes would be within scope and others would not. It is also not felt that the suggestion in the consultation document that, if the 2006 amendments relating to service provision changes were repealed, the provision of additional Government guidance on the scope of the TUPE Regulations would help to clarify this uncertainty. 2. If the Government repeals the service provision changes, in your opinion, how long a lead in period would be required before any change takes effect (i) less than one year; (ii)1-2 years; or (iii) 3-5 years? (iv) 5 years or more? 5 years or more Food and Drink Federation 6 Catherine Street London WC2B 5JJ Tel: +44 (0) Fax: +44 (0) Web: Registered office as above. Registered in London with limited liability. Certificate of Incorporation no VAT number: The Food and Drink Federation seeks to ensure that information and guidance it provides are correct but accepts no liability in respect thereof. Such information and guidance are not substitutes for specific legal or other professional advice.

2 a) Do you believe that removing the provisions may cause potential problems? / No b) If yes, please explain your reasons. As stated in our response to Question 1, FDF does not support the repeal of the service provision changes. However, if the Government were to do so, it must ensure that there is a long lead in period of at least 5 years and also prevent this change in the law applying to contracts that were signed before the final legislation was published. However, we feel that this would inevitably create a complex situation of different legal provisions applying to different transactions and is another reason why we do not think the law should be changed in the way that is being proposed by the Government. 3. Do you agree that the employee liability information requirements should be repealed? /No No. We appreciate that this is also intended as a deregulatory measure but the view of FDF members is that they find the statutory requirement to provide employee liability information by a deadline to be a useful back-up measure. However, the current 14-day deadline is considered to be too short and FDF members would therefore prefer it to be increased to a longer period of at least 28 days. If yes, please explain your reasons. Would your answer be different if the service provision changes were not repealed? No. We would prefer the employee liability information requirements to remain in place, with a longer deadline of at least 28 days, whether or not the service provision change category is removed. Do you agree that there should be an amendment to regulation 13 to make clear that the transferor should disclose information to the transferee where it is necessary for the transferee and transferor to perform their duties under that regulation? We feel that this would be a helpful amendment. 4. Do you agree with the Government s proposal to amend the restrictions in regulation 4 on changes to terms and conditions so that the restriction more closely reflects the wording of the Directive (article 4, which is in relation to dismissals) and the CJEU case law on the subject? / No Food and Drink Federation Page 2

3 FDF members are concerned that the current very strict restrictions on making changes to terms and conditions of employment following a TUPE transfer create many problems for them and therefore welcome this proposal to limit the restrictions as far as possible. It is our understanding that some other Member States take a more relaxed approach to the question of making changes to terms and conditions of employment after a TUPE than the UK with, for example, it being possible in France to agree to making these changes by means of a collective agreement after 15 months. We feel that this is a good illustration of the very conservative approach that has often been followed when transposing EU Directives into UK legislation b) Do you agree that the exception for economic, technical or organisational reasons entailing changes in the workforce should be retained? 5. The Government is considering using article 3.3 of the Acquired Rights Directive to limit the future applicability of terms and conditions derived from collective agreements to one year from the transfer. After that point, variations to those terms and conditions where the reason was the transfer would be possible provided that overall the change was no less favourable to the employee. Is this desirable in your view? / No. a) Please explain your answer We consider that this is a welcome change that is specifically allowed by the Acquired Rights Directive and that its non-use until now has been an example of gold-plating in the UK s transposition of this Directive. FDF members feel that limiting the future applicability of terms and conditions of employment to one year after a TUPE transfer will give them some additional flexibility to vary them. It would also be helpful if the Government provided employers with some practical guidance on how these changes could be made, particularly in those situations where the new employer is operating in a non-unionised environment. b) Do you agree that there should be a condition that any change after the one year period which is by reason of the transfer, should be no less favourable overall than the terms applicable before the transfer? / No. This condition will help to provide some protection for employees terms and conditions of employment after a TUPE transfer but will do so in a more flexible way than at present. c) If the outcome of the Parkwood Leisure v Alemo-Herron litigation is that a static approach applies under TUPE, do you think that such an approach would provide useful additional flexibility for changing such terms and conditions? Please explain your answer. Food and Drink Federation Page 3

4 This is not an issue on which FDF members have expressed an opinion. d) Do you think there any other changes that should be made regarding the continued applicability of terms and conditions from a collective agreement (bearing in mind the limitations of Article 3(3) of the Directive)? / No We have nothing further to add. Question 6: Do you agree with the Government s proposal to amend the wording of regulation 7(1) and (2) (containing the protection against dismissal because of a transfer) so that it more closely reflects the wording of the Directive (article 4) and the CJEU case law on the subject? / No. It is felt that the current wording applying to dismissals for a reason connected to a transfer creates uncertainty about what connected to means and that it also goes beyond the requirements of the Acquired Rights Directive. b) Do you agree that the drafting of the restrictions to terms and conditions in regulation 4 and the drafting of the protection in relation to dismissal (regulation 7) should be aligned? /No as we feel that it makes sense to align the drafting of these two regulations. 7. Do you agree that TUPE should be amended so that regulations 4(9) and (10) are replaced by a provision which essentially copies out article 4(2) of the Directive? /No a) Please explain your reasoning. We feel that this will remove some of the unfair elements of the current law which can mean that the transferor or transferee suffers the consequences of something that has been done by the other party. It will also remove an element of gold-plating from the Regulations. 8. Do you agree with the Government s proposal that 'entailing changes in the workforce' should extend to changes in the location of the workforce, so that 'economic, technical or organisational reason entailing changes in the workforce' covers all the different types of redundancies for the purposes of the Employment Rights Act 1996? / No. We consider that making this proposed change will simplify the law and correct the situation where a change of location following a TUPE transfer could give rise to an automatically unfair dismissal. Food and Drink Federation Page 4

5 9. Do you consider that the transferor should be able to rely upon the transferee s economic, technical or organisational reason entailing changes in the workforce in respect of pre-transfer dismissals of employees? / No a) Please explain your reasons. We feel that this is a sensible and welcome change. It is not right that a dismissal for an ETO reason, which would be permissible if made after a TUPE transfer, is prevented from taking place prior to the transfer. 10. Should there be an amendment to ensure that any actions of the transferee before the transfer takes place count for the purposes of the requirements to consult on collective redundancies (under the Trade Union and Labour Relations (Consolidation) Act 1992), therefore allowing consultations by the transferee with staff who are due to transfer to count for the purposes of the obligation to consult on collective redundancies? / No 11. Rather than amending Regulation 13(11) to give clarity on what a 'reasonable time' is for the election of employee representatives do you think our proposal to provide guidance instead would be more useful? / No a) Please explain your reasons. We feel that some flexibility is needed around timescales to reflect different circumstances and that this can best be achieved by the Government providing employers with some practical guidance rather than amending Regulation 13(11). b) If you disagree, what would you propose is a reasonable time period? 12. Do you agree that regulation 13 should be amended so that micro businesses are able to inform and consult with affected employees directly in cases where there is not a recognised independent union, nor appropriate existing employee representatives (under regulation 13(3)(b)(i)), rather than have to invite employees to elect representatives? / No Food and Drink Federation Page 5

6 a) If your answer to the above question is yes, would it be reasonable to limit this option so that it were only applicable to micro businesses (10 employees)? / No We consider that, rather than limiting this option to micro businesses, it would be more helpful for employers to limit it to TUPE transfers where 10 or fewer employees are to be transferred irrespective of the size of the employers involved. 13. Do you agree that micro businesses should be included under all the proposed amendments to the TUPE regulations? /No. We consider that it will create unnecessary complexity for employers if the law is different on points of detail for micro businesses compared with other employers. a) If not, are there particular areas where micro businesses should be exempt? Please explain your answer. b) Do you think that any of these proposed changes are likely to impose additional costs on micro businesses? / No No c) If so, please give details and suggestions where these costs could be decreased or avoided entirely. 14. Do you agree that apart from the proposals in relation to service provision changes, there are no other proposals which give rise to the need for a significant lead-in period? / No 15. Have you any further comments on the issues in this consultation? One issue on which we would like the Government to act is to remove the obligation to provide information on the use of agency workers during a TUPE transfer. This will not be relevant in a TUPE transfer and, as a result, some employers may inadvertently fail to comply with this recently-introduced obligation and therefore could potentially incur a significant penalty. In our view, this obligation to provide information should be confined to permanent employee consultation bodies established under the Information & Consultation of Employees Regulations, as indicated in Article 8 of the Temporary Agency Workers Directive. 10th April 2013 Food and Drink Federation Page 6

7 The UK Food and Drink Manufacturing Industry The Food and Drink Federation (FDF) represents the food and drink manufacturing industry, the largest manufacturing sector in the UK, employing up to 400,000 people. The industry has an annual turnover of over 76bn accounting for 15% of the total manufacturing sector. Exports amount to over 12bn of which 77% goes to EU members. The Industry buys twothirds of all UK s agricultural produce. The following Associations are members of the Food and Drink Federation: ABIM ACFM BOBMA BSIA BSNA EMMA FOB PPA SMA SN SNACMA UKAMBY Association of Bakery Ingredient Manufacturers Association of Cereal Food Manufacturers British Oats and Barley Millers Association British Starch Industry Association British Specialist Nutrition Association European Malt Product Manufacturers Association Federation of Bakers Potato Processors Association Salt Manufacturers Association Sugar Nutrition UK Snack, Nut and Crisp Manufacturers Association UK Association of Manufacturers of Bakers Yeast Within FDF there are the following sectoral organisations: BCA BCCC CIMA FF MG ORG SG SSA UKHIA UKTC VEG YG British Coffee Association Biscuit, Cake, Chocolate and Confectionery Group Cereal Ingredient Manufacturers Association Frozen Food Group Meat Group Organic Group Seafood Group Seasoning and Spice Association UK Herbal Infusions Association UK Tea Council Vegetarian (Meat-Free) Group Yoghurt and Chilled Dessert Group Food and Drink Federation Page 7