Is it possible for management and the unions to agree not to apply an overall no less favourable (‘ONLF) term as an alternative to closure and redundancy?
New TUPE (2006) does provide for “permitted variations” to terms and conditions where there are “relevant insolvency proceedings”, so long as the variation is agreed by the representatives of the affected employees and is made with the intention of “safeguarding employment opportunities by ensuring the survival of the business”. However, The DTI guidance suggests that there must be actual insolvency proceedings, and it is not enough to simply say that without the reduction in terms and conditions the business would close. LGE suggests that in such a situation authorities should take advice on the best way to proceed. Alternatively, there is the “economic, technical and organisational” reason for a change in terms and conditions. This is probably the better course, but requires changes in the workforce in terms of numbers or functions. In this case, the ETO reason is the profitability of the business post-transfer and, if accompanied by a reduction in the number of employees (or, less l
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