TUPE

What is TUPE?

TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations. It exists to protect employees if the business in which they are employed changes hands. Under TUPE employees and any liabilities associated with them are legally moved from the old employer to the new employer.

When does TUPE apply?
TUPE can apply when an employer:

  • buys or sells part or all of a business as a going concern;
  • outsources a service (e.g. where services transfer from the customer to an external contractor)
  • a subsequent transfer (e.g. where services transfer from a first external contractor to a different external contractor
  • brings a service back in-house (e.g. where services transfer from an external contractor back to the customer)
  • take over or grant a lease or licence of premises and operate the same business from those premises.

What do employers need to know about TUPE?
To protect your business from claims, you need to understand when TUPE is likely to apply and what you have to do to comply with the law.

Determining when TUPE applies is not straightforward. Our experienced solicitors can advise on the exact circumstances your business faces. If you think a transaction you are involved in might be covered by TUPE you should always seek specialist legal advice. 

Our solicitors can also advise on what action should be taken if TUPE does not apply.
 

What does TUPE mean for employees
Employees who are employed in the undertaking which is being transferred have their employment transferred to the new employer.

Employees can object to the transfer (or "object") but, depending on the circumstances of the case, they can lose valuable legal rights if they do. Employees have the legal right to transfer to the new employer on their existing terms and conditions of employment and with all their existing employment rights and liabilities intact, albeit there are special provisions for dealing with old age pensions under occupational pension schemes.

Taking on another business

Under TUPE, a new employer effectively steps into the shoes of the old employer as though the employee's contract of employment was always made with the new employer.

If you are taking on another business it is important to know all about the employees you may be taking on. You should ensure that the contract you enter into  protects your company from any employment liabilities which arose before the company became the employer. 

TUPE and Unfair Dismissal

A dismissal will be automatically unfair where the sole or principal reason for the dismissal is the transfer.

However a dismissal may not be automatically unfair where the dismissal is for an economical, technical or organisational reason requiring a change in the workforce (ETO reason) . 

How do you comply with TUPE?
Inform and consult with staff. You must inform appropriate representatives of the affected employees of the transfer and any measures proposed, and must consult on any proposed measures. Certain specified information must be provided to the representatives long enough before the transfer to enable the outgoing employer to consult with them about it.

If there is a failure to inform and consult, a complaint can be made to the Employment Tribunal. If successful, the Tribunal can award  compensation of up to a maximum of 13 weeks' pay per affected employee. Information and consultation failures can result in joint and several liability between the outgoing and incoming employers.

Failing to comply with TUPE can expose employers to potentially large Emplyment Tribunal claims.

TUPE is a complex area of employment law, so it pays to take expert advice. If you need help with TUPE, contact our Employment Law team on 01827 317070 or employment@pickerings-solicitors.com