In its response to a government call for evidence on the Transfer of Undertakings and Protection of Employment (TUPE) regulations, the TUC has warned that weakening TUPE risks driving down pay and increasing unemployment.

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 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.

Employers are also pressing the government to remove the amendments on 'service provision changes' introduced in 2006. This would create major uncertainty for businesses, employees and their unions on whether TUPE applies to the outsourcing of services, or when services are brought back in-house, says the TUC, and would generate needless and costly litigation.

These changes could also lead to the erosion of the pay and conditions of low-paid service sector staff such as cleaners and catering staff. The TUC argues this would have an adverse impact on women, who are disproportionately employed in contracted-out services. According to the Annual Survey of Hours and Earnings (ASHE) 2011 74% of cleaners and domestics are female. Similarly 65% of kitchen and catering assistants are women.

TUC General Secretary Brendan Barber said: 'TUPE law protects workers and gives businesses valuable security. Tampering with the regulations would not only generate uncertainty and needless litigation, it would also make low-paid workers vulnerable to mistreatment.”