Business transfers – TUPE

TUPE rules and regulations are incredibly complex.  Not only that, legislation and how courts interpret the regulations often changes.  It can be a challenge working out if the rules even apply to your situation. Getting it wrong will either waste a lot of your time or cost you a lot of money in damages.

TUPE refers to a huge piece of legislation: 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”. The TUPE rules apply to organisations of all sizes and protect employees’ rights when the organisation or service they work for transfers to a new employer.Let our expertise guide you through the process.

Every business owner and HR professional will have to deal with the transfer of a business or a commercial contract at one time or another – whether you are buying or selling part of a business or involved in the change of a service provider to a contract. There is no pretending it’s tricky and complicated and unfortunately, quite often ignored.

That’s where we come in. You’ll know exactly what your obligations are and what risks are involved. We will provide you with the highest quality, authoritative tailored advice and ensure that you are not left in a vulnerable position further down the line.

We will also provide frank, practical guidance to assist you through due diligence, consultation, and contract negotiations to make the transfer as smooth as possible.

 

Deciding who and what transfers under TUPE

Only those employees who are “assigned” to the transferring business or contract go over to the new employer under TUPE. They with their continuous service intact. All duties, rights or obligations under their contract of employment will also transfer to the new employer. In effect, the new employer steps into the shoes of the old one. However, there are some exceptions including most occupational pension rights.

 

Change and reorganisation where TUPE applies

TUPE imposes significant constraints on your ability to make changes. The law prohibits you from making any changes to the contract of a transferring employee by reason of the transfer, even if the employee agrees to the change. It is also automatically unfair to dismiss someone by reason of the transfer. Contract changes and dismissals by reason of the transfer are only allowed if you have an economic, technical or organisational reason.

 

Informing and consulting employees on a TUPE transfer

Before the TUPE transfer takes place, both the old employer and new employer must inform, and sometimes consult, with representatives of their employees who are affected by the transfer. This statutory obligation applies even if only one employee is transferring.

In addition, if 20 or more redundancies are proposed, employees have a statutory right to collective consultation before the redundancies can be implemented. TUPE includes a special provision allowing the new employer to carry out statutory collective consultation on redundancies before the transfer takes place.

 

Employees who object or resign over a TUPE transfer

Employees cannot be forced to transfer and work for the new employer. There are a number of circumstances in which a transferring employee can object to or resign over a transfer. The employee might simply object to being employed by the new employer, or are resigning over changes proposed by the new employer.

 

Sharing information between employers before transfer

Under TUPE, the new employer inherits the employees who work in the transferring business or contract, together with almost all their existing contractual and other rights. The law requires the old employer to provide basic information to the new employer about each employee who will be transferring. This is called Employee Liability Information. In practice, the new employer will often ask for additional information, sometimes through a due diligence process.

 

Let our expertise guide you through the process.

Every business owner and HR professional will have to deal with the transfer of a business or a commercial contract at one time or another – whether you are buying or selling part of a business or involved in the change of a service provider to a contract. There is no pretending it’s tricky and complicated and unfortunately, quite often ignored.

That’s where we come in. You’ll know exactly what your obligations are and what risks are involved. We will provide you with the highest quality, authoritative tailored advice and ensure that you are not left in a vulnerable position further down the line.

We will also provide frank, practical guidance to assist you through due diligence, consultation, and contract negotiations to make the transfer as smooth as possible.

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