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In defence of service provision changes?

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Article
H

Wynn-Evans, Charles

Industrial Law Journal

2013

42

2

July

152-179

labour law ; relocation of industry

United Kingdom

Law

http://dx.doi.org/10.1093/indlaw/dwt007

English

"The introduction in 2006 of the service provision change, as an alternative form of relevant transfer for the purposes of the Transfer of Undertakings (Protection of Employment) Regulations 2006, was intended to enhance legal certainty and employee protection in relation to changes of providers of labour-intensive activities. The Government has now embarked upon consultation over potential reform of various aspects of the domestic transfer of undertakings legislation, including a proposal to repeal its provisions relating to service provision changes. This article assesses the proposed abolition of service provision changes by reference to the policy considerations that led to their introduction, the jurisprudence in the intervening period and the arguments now deployed in support of the proposed reform of the legislation. The case for retention of the service provision change regime argues not only that the case law since 2006 has narrowed the differences between service provision changes and ‘traditional' transfers of undertakings, thereby addressing to a significant extent the concerns raised by critics of the service provision change concept about its expansion of the transfer legislation; it also contends that the abolition of service provision changes would be a retrograde step, not solely in terms of employee protection. The application of the transfer legislation in the context of labour-intensive activities would then revert to the uncertain and unsatisfactory legal position created by the ECJ decision in Ayse Süzen and its interpretation in the associated domestic case law. The case for repeal argues that the service provision change regime constitutes unnecessary ‘gold-plating' of the domestic transfer legislation and leads to impaired market efficiency. This debate not only reflects the difficulties arising from the technicalities of the transfer legislation; it also derives to a significant extent from the inevitable conflict between employment protection and its effect on competition in relation to the provision of services. "

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