TUPE stands for Transfer of Undertakings (Protection of Employment), and is designed to safeguard jobs under certain conditions. These include:
- Business transfers – When a business is sold in its entirety, when part of the business is sold, or in a merger between two companies.
- Service provision changes – When a piece of work previously done in-house is outsourced to a contractor, or vice versa.
To find out whether TUPE regulations apply to your particular situation, clients can call the 24 hour employment law advice line to discuss their circumstances with a professional.
How TUPE regulations affect employers:
If it is decided that your situation requires it, the TUPE law will apply. This means that all employee contracts with the original business owner or service provider (transferor) will be automatically transferred to the new one (transferee). Exactly the same terms and conditions of employment must be maintained. TUPE applies to companies of all sizes – even small businesses – as well as UK transferors whose employees who are based outside of the UK.
TUPE regulations for the transferor:
- All your affected employees have the right to a TUPE consultation, through a trade union or employee representative. Failure to provide a TUPE consultation could result in unfair dismissal claims.
- You must provide the transferee with written information about all the affected staff and their contracts.
- Under TUPE law, contract terms cannot be altered before the transfer, once the employer becomes aware that it will be taking place.
TUPE regulations for the transferee:
If a business is being transferred to you, you may need to adapt your health and safety policy and procedures, risk assessments and even insurance policies to cover your new employees. However, the most important thing to remember is that all terms and conditions of employment must be maintained.
TUPE pensions and holidays:
- Any accrued occupational pension will be transferred. If the previous employer offered a scheme that you don’t offer, you must provide a suitable alternative and match their contributions.
- Holiday pay entitlement, accrued additional holidays and any Time In Lieu will also be transferred under TUPE.
- If you offer better holiday entitlement or terms of employment than your predecessor, you need to change the contracts of new employees to give them the best option.
- It is common for the transferee to decide to make redundancies after the transfer. However, if this is the case, transferred employees should be considered on a level playing field with original employees, and will qualify for the same redundancy payments.
- It is not permitted to make redundancy selections based on whether employees were transferred or not – there must be an objective technical or economic reason.
- If making redundancy payments, the employee’s length of service is calculated from their start date with the transferor – not the date you took over as their employer.
Whether you’re the transferor or transferee, you can call our employment law helpline any time for advice on TUPE redundancy, pensions or general regulations. If you have been accused of unfair dismissal relating to TUPE, contact us to learn more about our employment tribunal services.