• Firstly, all the Regulation numbers have been changed, for the purposes of quoting the Regulations.
• Since 1981, there have been a considerable number of cases to determine a relevant transfer. Regulation 3 will simplify this by making the legislation as all-encompassing as possible by reference to service provision change rather than transfer. The aim is to provide a level playing field for contractors. Even where there is the intention to change the way a service is provided, the Regulations will apply, and it will be for the transferee to deal with any redundancies or other dismissals arising from the service change. The onus will be on the incoming contractor.
• Regulation 4 will attempt to clarify who transfers and draws upon the Botzen judgement (Botzen v RDM [1985] ECR519, Case 24/85); and in particular, is aimed at preventing transferors from engaging in sleight-of-hand by moving employees around between contracts that are being transferred, and those being retained, a practice that tends to have detrimental effects on both the employees and the transferee. When determining who is transferred, it will be the employees assigned to that contract. Also included in Regulation 4 will be confirmation that a transfer (service provision change) does terminate the contract of employment with the transferor.
• There is the intention to add to Regulation 6, by further Regulation, provisions applicable to Central Arbitration Committee (CAC) proceedings and declarations. Diligence with your ?due diligence? is therefore a must.
• Regulation 7 will confirm the position with regard to employee's rights within the first year of service, on redundancy, and for the over 65s. Particular note should be taken of new regulation 7(3)(b) which could be interpreted as to provide redundancy payments for a dismissal for SOSR (?some other substantial reason?). Of all the new provisions, this could be the one that will generate the most legal action. At first glance, Regulation 10 appears to exclude occupational pension schemes from a transfer and to protect the transferor from any action arising with regard to pensions. However, the entitlement to the transfer of pension rights was introduced on 6 April 2005 in the new Pensions Act, with limitations on the obligations of the transferee as to the percentage of the employer's contributions.
• A new provision within Regulations 11 and 12 deals with the notification of employee liability information by the transferor. However, the loose wording is likely to give rise to legal action to define this provision e.g. what is good time and when is completion of the relevant transfer? if conducted in a series of steps The opinions above can only be guidance until the new Regulations are issued and if necessary, tested in law. Also, individual aspects of these Regulations may be affected by current legal action, or process (such as the question of the over 65s).

The Regulations on insolvency have not been discussed in this article.

The bottom line is that the employment law applying to business transfers is still going to be complicated. For further information or a discussion around your needs, please contact Campbell Ritchie on 01494 478 806 or email campbell@hradvantage.co.uk .

June 2005