TUPE – business transfers

TUPE rules and regulations are incredibly complex.  Not only that, legislation and how courts interpret the regulations often change.  It can be a challenge working out if the rules even apply to your situation. That’s where we come in. We are specialists in employment law.

It can be confusing and upsetting to be told the place where you work is being sold or the contract you have been working on has been lost to someone else. It is natural to be concerned about what will happen to you.

There are laws to protect you – the ‘Transfer of Undertakings (Protection of Employment) Regulations 2006’ as amended by the ‘Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014’ are called TUPE for short.

TUPE rules protect your employment rights no matter how big or small your employer is.

There are two situations when the TUPE regulations may apply:

 1. Business transfers

This is when the business (or part of it where you work) moves to a new owner or merges with another business to create a new employer.

2. Service provision transfers

This is when there is:

  • Outsourcing – a contractor takes on activities from a client
  • Insourcing – a client takes back activities from a contractor
  • Retendering – a new contractor takes over activities from another contractor

 

What happens to my contract?

When TUPE applies, you move automatically from the old employer to the new one. You have the same terms and conditions of employment with the new employer. There is no break in the continuity of employment, so you won’t lose out on any accrued service or employment rights.

  • Before the transfer

Your existing terms and conditions cannot usually be changed by the old employer to make them the same as those of the new business – even if you agree to the change.

  • After the transfer

Your new employer cannot change your terms and conditions just because there has been transfer. This would amount to automatic unfair dismissal if this were the sole or principal reason for the change.

You will probably find your contract terms are different to those of your new colleagues. A new employer can, however, change your terms and conditions for an ‘economic, technical or organisational’ reason.

  • ‘Economic’ reasons are to do with how the company is performing
  • ‘Technical’ reasons are to do with the equipment or processes the company uses
  • ‘Organisational’ reasons are to do with the structure of the company

New employers can improve your terms and conditions if you agree, for example, harmonising the holiday entitlement.

 

How am I kept informed as to what’s happening?

Your employer must inform and consult with you directly or with your elected representatives.

The information must be given in writing and include:

  • The fact that the transfer is going to take place, also when and why
  • Any social, legal or economic implications such as a change in location or risk of redundancies
  • Any measures or changes that the old and new employers expect to take
  • The number of agency workers employed, the departments they are working in and the type of work they are doing if agency workers are used
  • The old employer must provide information about any measures which the new employer is considering taking

 

What happens if I am dismissed?

There will be occasions when dismissals and redundancies cannot be avoided.

If you are dismissed either before or after a transfer and the sole or principal reason for it is the transfer, it will be automatically unfair. You can bring a claim in an Employment Tribunal.

If your terms and conditions are going to been substantially changed for the worse before or after a transfer, you have the right to terminate your employment and claim constructive dismissal at a Tribunal. TUPE classifies these types of resignations as dismissals.

Sometimes redundancies are unavoidable. Here employers must consult directly with affected employees and also with your representative if the new employer is making (or intending to make) 20 or more redundancies within a 90-day period. Where there are fewer than 20 employees being made redundant within a 90-day period, there is still a legal requirement to consult with you, but only individually. There are no prescribed time limits in which to do so.

 

Can I refuse to be transferred?

Yes, but it will mean your employment comes to an end when the transfer happens. You are unlikely to get any notice pay.

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