A “race to the bottom” for pay could be created if the Transfer of Undertakings and Protection of Employment (TUPE) regulations are changed, according to the Trades Union Congress (TUC).

Following a call for evidence over an amendment to TUPE, the union responded by arguing that any weakening of the rules would risk driving down pay and benefits and increase unemployment.

Despite the fact that the current legislation complies with a European Directive to provide protection for both employees and employers, the Government is concerned that the legislation is “gold-plated” and over bureaucratic.

TUPE regulations are designed to protect workers’ terms and conditions when a business is transferred from one owner to another. Continuity of service is therefore also sheltered.

TUC General Secretary, Brendan Barber, said: “Weakening the guarantee on pay and conditions would encourage companies to compete for contracts based solely on wage and other employment costs, and not on the quality of service.”

The call for evidence has now closed. Depending on the findings of this initial investigation, the Government may announce a formal consultation on any proposed changes later this year.