August 29, 2018

The transfer of ownership in a business or organisation from one owner to another.

TUPE (Transfer of Undertakings, Protection of Employment) is designed to bring assurances to employees who will be protected under the TUPE regulation.

As an employer in the UK, irrelevant of your business size, your employees will automatically be protected under the TUPE regulation, where their role and employment will continue under the new ownership.

Except in the case where they have been made redundant, or the company is undergoing insolvency.

Examples Of TUPE

TUPE regulations differentiate between business transfers and service provision transfers.

If your business is being transferred to a new owner, or two companies are merged into a new business, TUPE regulations will apply.

If the activities of one of your service provisions are being transferred to a new contractor or client, in the form of outsourcing, re-tendering or 'insourcing', then TUPE regulations will also apply.

An example of outsourcing to a contractor could be for ICT or catering services.

Re-tendering, on the other hand, occurs when the existing contractor’s contract is coming to an end, and new contractors can tender for the contract.

In the case of a new catering company being awarded the contract, the existing cooks and catering staff will be protected and continue to work in their role, but under the new contractor.

The third way of transferring services is by 'insourcing', referring to the transfer of work back to in-house resources once an existing external contract has ended.

A common misconception is this will reduce costs.

However, it can be more expensive to implement new processes unless the internal infrastructure is already in place.

Uncertainty Within Employees

The terminology associated with being TUPE’d can often bring uncertainty to employees, as they are unfamiliar with such jargon.

Many workers that have worked for decades within the company may not accept change readily and hold regular communication sessions with staff, and their elected representatives can help alleviate doubts.

If an employee feels their transfer involves significant changes that do not benefit them, or if an employee is unfairly dismissed during transfer, they have the right to take their case to an employment tribunal.

Employers Role In Transfers

The incoming employer will take control of all employment contracts and the rights within the contracts, that existed before the transfer.

They will not take control of any criminal liabilities or rights for old age or invalidity.

Outgoing employers or transferrers must provide adequate information on all employees being transferred, also called Employee Liability Information.

This disclosure of information should include accurate, secure information such as identity, age and any collective agreements.

But also any disciplinary actions, grievances and legal actions in the last two years. The transfer of this data should occur before 28 days of the transfer date.

Outgoing employers must communicate and consult with employees through their elected representatives or trade unions, or with the employees themselves direct if no representatives exist.

All communication should be given in writing with details of the transfer, including dates and reasons for the transfer.

The risk of redundancies, changes in location, social and economic implications should also be communicated, as well as any changes the incoming employer will implement.

Summary of TUPE

  • TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations;
  • It is relevant to any redundancy decisions where a business (or part of it) is transferred from one owner to another;
  • The incoming employer will take control of all employment contracts;
  • Outgoing employers or transferrers must provide adequate information on all employees being transferred;
  • Outgoing employers must communicate and consult with employees.

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About the author 

James Rowland

James is the Commercial Director at Neathouse Partners and regularly writes articles surrounding issues in HR & Employment Law. Outside of the office, James is a keen Cricketer, playing in the Cheshire League for Nantwich CC. He also loves going to watch his football team, Crewe Alexandra. Feel free to connect with James on LinkedIn.

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