TUPE – Transfer of Undertakings (Protection of employees)
In its Policy Paper, Smarter regulation to grow the economy – GOV.UK (www.gov.uk) the Government has announced some interesting proposals that could have relevance to dental practice sales and purchases and employment contracts in dental practices.
TUPE Regulations
The Transfer of Undertakings (Protection of Employment) (TUPE) Regulations protect employees when the business or organisation for which they work transfers to a new owner.
Where a dental practice is being sold the owner has to inform and (sometimes) consult with employee representatives about the proposed sale and any potential employment implications for employees.
Currently, businesses cannot consult employees directly where they do not have employee representatives in place. Instead, there is a requirement to elect new employee representatives. The Government is consulting on removing this requirement for businesses with fewer than 50 people and transfers affecting less than 10 employees, allowing businesses to consult directly with the affected employees.
In our view this is a welcome reform saving time, expense and complexity in the course of a dental practice sale.
Non-compete clauses
Non-compete clauses are included in employment contracts to restrict an individual’s ability to work for or establish a competing business after they have moved on from a job. They can play an important role in protecting businesses who invest in their staff, but, (according to the Government) “unnecessarily burdensome clauses have become a default part of too many employment contracts, including where they fulfil no purpose. This can inhibit workers from looking for better paying roles, and limit the ability of businesses to compete and innovate.”
The Government intends to limit the length of non-compete clauses to 3 months, providing employees with more flexibility to join a competitor or start up a rival business after they have left a position.
Limiting non-compete clauses will not interfere with the ability of employers to use (paid) notice periods or gardening leave, or to use non-solicitation clauses. These reforms will not cut across arrangements on confidentiality clauses.
At matters stand these provisions are intended to affect contracts with employees and therefore would not affect contracts with staff (genuinely) engaged on self-employed contracts within dental practices. Nevertheless, the proposals may affect a number of Practices with senior employees (such as Practice Managers) who are employed on terms currently containing non-compete clauses in excess of 3 months.
