TUPE transfers on the sale or purchase of a business or service provision change.
What is TUPE?
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006) is the main piece of legislation governing the transfer of an undertaking, or part of one, from one party to another.
The regulations are designed to protect the rights of the employees being transferred, enabling them to enjoy the same terms and conditions, with continuity of employment, as before. Without this kind of legal protection for employees, their employment contracts would automatically end when the business changed hands. Whether to keep the ex-employees, and on what terms, would be at the complete discretion of the transferee.
What do the TUPE regulations mean for me?
If you are either buying a business, selling a business or changing a service provider there is a good chance that the employees involved will be protected by TUPE regulations. TUPE regulations are extremely complex and if not properly adhered to can cost your business in both the time spent dealing with issues and the cost of legal representation.
The Regulations provide that, on a relevant transfer of an undertaking or a part of an undertaking:
- All employees who were employed in the undertaking immediately before the transfer automatically transfer from the old employer (the transferor) to the new employer (the transferee). An employer cannot just pick and choose which employees to take on.
- The new employer takes over all rights and obligations arising from those contracts of employment, except criminal liabilities.
- Any liabilities relating to employees who were dismissed before the transfer (for a reason connected with it) also transfer to the transferee.
- Neither the new employer nor the previous one may dismiss an employee because of the transfer unless the dismissal is for an ‘economic, technical or organisational’ (ETO) reason. If there is no such reason, the dismissal will be unfair.
- If there is an ETO reason and it is the main cause of the dismissal, the dismissal will be fair provided that the employer acted reasonably in the circumstances.
- The employees’ representatives have the right to certain information and to consultation on the transfer.
- If the transfer involves a substantial, detrimental change in their working conditions, employees may object to the transfer, or resign and claim unfair dismissal (but not payment in lieu of notice).
- The new employer may not unilaterally worsen the terms and conditions of employment of any transferred employee.
- Any collective agreements made with recognised trade unions and any recognition agreements where the business retains a distinct identity following the transfer will also transfer.
What help can we give to you?
As well as providing legal advice on any aspect of TUPE, our Employment Law and HR Adviser team includes HR practitioners who can come in and ensure all of the proper processes are followed for you, leaving you free to run your business.
Our HR practitioners are trained to understand the important HR issues and to make sure TUPE procedures are compliant from an employment law perspective – giving you the peace of mind that if any disputes arise you will be in the best position to deal with them.
We work on day and half day rates and remember, if you are a Watertight member, you get 10% off our fees. Call us on 0114 303 2300 or email email@example.com to discuss, in confidence, any issues which you need to resolve.