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In its response to a government call for evidence on TUPE, the TUC warns that changing current legislation could also lead to an increased involvement of the private sector in public services, with contractors competing for business on lower wages rather than on the quality of the service they provide.

TUPE protects employees' terms and conditions of work when a business is transferred from one owner to another. Staff automatically become employees of the new employer on the same terms and conditions as they were on before, and their continuity of service is also protected.

The TUC argues that TUPE regulations also benefit employers by creating a level-playing field for businesses and enabling restructuring to take place more easily and without disputes.

The government is considering increasing the flexibility for employers to cut pay and conditions after a transfer takes place. This could lead to a race to the bottom, warns the TUC, with companies using low wages to compete for contracts in the public and private sector, rather than by quality of service, efficiency or innovation.

Current TUPE regulations also maintain employment levels, as new employers must retain original staff when they take over a business, argues the TUC. Cutting back on this vital right means employees could lose their jobs when the owner of their company changes, which would increase unemployment and reliance on welfare benefits.

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