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TUPE or not TUPE?

If an individual doesn’t want to transfer...

  • In very general terms, an employee who refuses to transfer is effectively resigning.

If you’ve won a contract and are taking on the employees....

  • Let the transferor know of anything connected with the transfer that may affect the transferred employees, e.g. if you are going to ask them to work out of a different site.
  • Consult with any of your existing employees if they are likely to be affected.
  • Make sure that the transferor gives you all the information you need in plenty of time.
  • Bear in mind that you could be jointly liable for any claims arising from any dismissals connected with the transfer.
  • Ensure you have all the relevant details of any relative dismissals and scrutinise them carefully.
  • If you have Economic, Technical or Organisational (ETO) reasons to make changes to the terms and conditions of your new employees involving the numbers in the workforce or the job function, you may do so.
  • You cannot justify changes merely to bring them in line with your existing employees and you cannot unfairly select them for redundancy.

If you are transferring an undertaking you need to...

  • Consult with the affected employees and/or their elected representatives.
  • Provide information about the employees. This is known as Notification of Employee Liability Information (NELI). The information must be provided at least two weeks before the transfer.

Seek expert advice

When a new contract is won it is important to assess whether TUPE comes into play.

TUPE stands for Transfer of Undertaking (Protection of Employment). In 1981, regulations were introduced to ensure that employees’ rights were protected in the event of a business transfer. Prior to this under common law, when a business was sold, existing contracts of employment terminated and the new employer could choose whether or not to employ any of the original staff.

If a group of employees are grouped together with the aim of pursuing an ‘economic activity’, then they form an ‘economic entity’. If that entity transfers to a new owner, so do the employees. The employees retain all their contractual rights and obligations, even where these differ from other employees already employed by the transferee.

The new employer (the ‘transferee’) acquires all the rights and liabilities associated with those employees. The employees retain all their contractual rights and obligations, even where these differ from other employees already employed by the transferee.

 

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