Specialist Guidance for Employers on the Transfer of Undertakings Rules
TUPE (or the Transfer of Undertakings [Protection of Employment] Regulations) applies whenever there is a transfer in ownership of a business. TUPE Transfers mean that, in general, employees transferring over to a new business, do so with their employment rights and terms and conditions intact. Getting the right legal advice from specialist TUPE Solicitors who really understand the regulations is essential
The regulations can however be a minefield. Whether you are an employer transferring over your business, an employer to whom the businesses being transferred, or an employee involved in any business transfer, you need to understand the law. Rest assured that our highly experienced employment law solicitors have that expertise and can provide expert advice on all aspects of TUPE.
Why choose our TUPE Solicitors?
- our team are TUPE transfer specialists
- we provide FREE initial phone advice about your TUPE problem
- we can deal with all of your TUPE related issues, wherever you or your business is based in England and Wales – taking your instructions by phone, email or Zoom or Teams video.
How our TUPE Lawyers can help you
There are a number of ways in which our team can help you:
- we can advise whether TUPE does indeed apply in your particular circumstances
- we can advise employers of the right procedure for transferring or dismissing any employees in the TUPE transfer process
- we can help employers with the correct process of employee consultation and the provision of essential information for employees
- if there is a dispute following the transfer of the business, we can advise employers whether or not their workers’ employment rights have been breached in the TUPE transfer and whether they have a valid employment tribunal claim as a result
What is TUPE?
In short, it’s a set of regulations relating to employees’ terms and conditions and it is designed to come into effect when the ownership of a business is transferred. The purpose of these regulations is to ensure continuity of service for employees wherever possible. In other words, when a business is transferred or sold, subject to certain exceptions, all employees will be transferred across to the new employer with their employment rights and terms and conditions intact.
The 2006 TUPE regulations and their amendment in 2014 set out the rules.
Key questions need to be asked in the event of a transfer to see whether it falls under the TUPE guidelines. For example, who is conducting the transfer and what exactly is being transferred? How any service provision is affected and how will this impact on employees?
What do employers need to do to comply with TUPE?
If you are an employer who is selling, transferring or outsourcing part or all of your business, then it is highly likely that you will need to take steps in order to comply with the TUPE Regulations.
The purpose of TUPE is to protect your employees’ rights, primarily;
• Their continued employment
• The continuance of their current terms and conditions
• Their current pensions
This means that employers must not take any actions that could harm their employees’ rights, or else they could end up facing an employment tribunal claim for unfair treatment or dismissal.
Therefore, in order to make sure you are complying with the TUPE Regulations, employers should ensure:
• They do not change the terms and conditions of their employees
• They do not dismiss any employees while the transfer is covered by TUPE unless it is for valid “economic, technical or organisational reasons” (such as if the business is insolvent and can show a genuine need for dismissals)
• They follow the proper dismissals procedures in the event of a genuine need to dismiss employees – and pay them the proper compensation following this
• Their employees understand why the change is happening, as transfers and sales can be a demoralising time and can leave employees worried for their jobs, even if they are perfectly safe
• They inform their employees in good time about the transfer. If there is a union representative, they should be told everything they need to know so that they can tell the employees what is going on
• They inform all employees of the date of and reason for the transfer
• The employer should also ensure the new employer provides them with any relevant information for them to pass on to the employees
It can sometimes be hard to know whether the TUPE Regulations apply to a specific situation, so if you are concerned and unsure whether TUPE affects you and your business, or whether you are doing all you need to in order to meet your obligations, you need specialist employment law advice.
Does TUPE apply to Contractors?
The basic principle is that only employees have TUPE rights. As a result, sub-contractors, agency workers and the self-employed don’t have TUPE protection.
However, when the provision of a service is contracted out, the TUPE regulations usually apply. For instance, if one company has been operating as a contractor to deliver a service (managing a canteen, let’s say) and then another contractor takes over at the end of the original contract, the TUPE rules would come into effect.
The purpose of this is to protect the employees so they are not suddenly and unfairly made redundant.
However, issues relating to TUPE transfers and contractors are not always straightforward, which means it can be worthwhile seeking legal advice if you are unsure whether TUPE actually applies to you – whether you are a contractor or employed by a contractor. For example, if there are multiple contractors involved with delivering parts of the same contract, it can raise some complicated issues if the contracts are then changed.
Changes in 2014 provided that TUPE only applies when a contract is taken over by another company and the work is carried out in “fundamentally the same way” as previously. If there are significant changes in the contract, this means it is less likely to be covered by TUPE and gives business owners more certainty.
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Contractor Case study: NASS
One good example of this is the National Asylum Seekers Service, which commissioned multiple contractors to deliver services on its behalf. In the north-west, four private contractors were initially used but when the contracts were renewed after five years, one of them wasn’t included in this. This led to the employees of that contractor being reallocated to the other three providers.
In turn, this raised questions of whether TUPE applied to those employees on the grounds they were taking over an activity. In the end, it was ruled that they were not and so TUPE did not apply.
This case raises some of the complexities inherent in the issue of TUPE rights and contractors and also highlights the need of specialist advice in such situations.
