TUPE: TRANSFER OF UNDERTAKINGS (PROTECTION OF EMPLOYMENT) REGULATIONS
How we can help you avoid costly employment claims:
Advise you on your obligations when transferring or acquiring an organisation
Help you to plan a legal consultation and transfer process
Advise you whether TUPE applies to any redundancy or dismissals you need to make
Whether you are acquiring a new organisation or selling one, you should be aware of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (known as TUPE) which sets out the processes which must be followed when organisations are transferred.
DOES TUPE APPLY TO MY BUSINESS?
The protections apply when organisations are sold to a new owner or merged with another organisation. In service agreements, it applies when a contractor takes over in-house duties, an employer takes over duties from a contractor, or one contractor is replaced by another.
A business has transferred when its main assets have transferred and the business activities are the same or similar. While it is generally clear when a transfer has occurred, in complex arrangements it can be difficult to apply the law – for example, if work is divided between multiple contractors or where there is a transfer of shares.
TUPE protects employees but can also apply to workers in some cases. Find out more about employment status and how a tribunal will decide whether somebody is an employee.
If you are unsure whether TUPE applies to your transfer, you should seek legal advice. The cost of advice will be far lower than the potential cost of legal claims if you make mistakes.
Get in touch to discuss how we can help.
WHAT DIFFERENCE DOES TUPE MAKE TO MY TRANSFER?
Consultation
Before the transfer, both organisations must consult with a recognised trade union or elected staff representatives to inform employees about the transfer and why it is happening. There is no fixed time, but it must be long enough to explain and discuss the changes.
Staff who are being transferred must be made aware of any changes the new employer plans to make. Staff who are not being transferred should be consulted about how the changes might affect them.
Your employees will be able to claim compensation if you fail to properly inform and consult with them before transferring the organisation. You should include employees who are off work on sick leave, maternity leave or other parental leave, otherwise you could face discrimination claims.
Contract terms
The terms and conditions of employees’ contracts will transfer to the new employer, as will existing collective agreements.
If you are the new employer and need to make changes to the contract, your obligations will depend upon whether the changes relate to the transfer or not. Changes relating to the transfer must be due to an economic, technical or organisational reason, or must improve the terms and conditions. This protection applies throughout the employment, no matter how long after the transfer. Changes not relating to the transfer may be made by agreement, like all employment contracts.
If you do not meet the terms of your employees’ contracts or try to force changes, they may claim for breach of contract. If the breach is serious enough to end the contract, you could also face claims for constructive dismissal.
New employees do not have an automatic right to the same terms and conditions as existing employees. However, you may find that bringing terms in line (by improving terms and conditions where necessary) could benefit your business by making it easier to manage staff and avoiding discrepancies that could lead to disputes.
We can help you understand whether the changes you wish to make are allowed by TUPE, and how to make the changes legally.
Sharing information
The previous employer must provide certain employee information to the new employer. Some of this information will be personal data, and so you will need to abide by the General Data Protection Regulations (GDPR) and the Data Protection Act 2018.
Find out more about your duties as an employer under GDPR.
Dismissing staff
You cannot dismiss employees without fair reason before the transfer. You should take extra care with disciplinary matters, to avoid claims of unfair dismissal.
Employees who refuse to transfer will generally be treated as resigning and will not be able to claim unfair dismissal or redundancy pay. However, it is a good idea to consider the reasons why they don’t want to transfer. Their hesitancy could also be a warning about problems in the workplace and responding to these concerns could help you avoid future legal disputes.
Redundancy
When making redundancies, you must follow the normal redundancy process and meet your usual obligations. However, if the redundancies relate to the transfer you must also have an economic, technical, or organisational need for the redundancies.
You must treat transferred staff no differently from pre-existing staff during redundancy. You cannot select employees for redundancy based on whether they have been transferred or not.
Employees’ service for the previous employer must be counted in their redundancy pay, and you must honour any enhanced redundancy pay in their contract.
WHAT HAPPENS IF BUSINESSES CAN'T AGREE A TUPE PROCESS?
It is a good idea for both organisations to agree a transfer plan and be involved in consulting with employees. This is helpful for a smooth transition and good staff morale. It is also important you are confident that your process meets your legal obligations, as any mistakes could cost your company.
Unfortunately, sometimes organisations disagree about whether TUPE applies and to which employees. If you are having difficulty, a legal advisor can help you to understand your obligations and how to conduct the transfer in line with TUPE.
GET IN TOUCH
Do you have a legal matter you'd like to discuss with us? Get in touch using the details below or use the form here and a member of our team will be in touch to discuss your enquiry.
Address: Spencer Shaw Solicitors Limited
St Mary's House, 68 Harborne Park Road,
Harborne, Birmingham, B17 0DH
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