TUPE effectively assists the automatic transfer of employees’ contracts of employment from one employer to another where the work that the employee undertakes transfers from their current employer to a new employer. Under the Regulations, work will be transferred from one employer (the ‘transferor’) to another (the ‘transferee’) in two defined situations.
A business transfer will commonly occur where a business is sold in its entirety, or where a particular part of a business is sold onto another company – a ‘business transfer’. However, TUPE will not apply to pure share transfers alone, as this is not a transfer of a business; it is merely a change in the ownership of who owns that business. Peninsula’s 24 Hour Advice Service can discuss this with you further, and assess whether TUPE will apply in a given situation or not.
A transfer will also be effective during occasions of a ‘service provision change’, which is in essence where a particular piece of work is either outsourced to a contractor, taken in-house from a contractor, or changes from being provided by one contractor to another.
A well-known example of this situation would be in a cleaning firm. Take Company X, who have 1 cleaner who currently cleans their premises. This cleaner is currently employed by Company X. If Company X decides that they no longer wish to have their own in-house cleaners, and instead they wish to go to a contractor to provide this, TUPE will apply in this instance as it would amount to a service provision change, and the cleaner employed by Company X to do the in-house cleaning will transfer to the new contractor who takes over the cleaning of the premises as the cleaning work will still be undertaken but will be carried out by a contractor instead of by Company X directly.
The TUPE Regulations ensure that an employee’s contract of employment does not terminate by reason of the transfer. Instead the contract will be transferred from the old employer to the new one on the same terms and conditions of employment that they enjoyed previously with the transferor.
Where there is transfer to which TUPE applies, the transferee and transferor have obligations to consult with all affected staff. Transferors are obliged to give transferees written information about ‘any person employed by the transferor who is assigned to the organised grouping of employees that is the subject of a relevant transfer’ and all the associated rights and obligations towards them. This information is referred to as ‘employee liability information’.
It is not advisable to dismiss any employee as a direct result of the transfer; otherwise it could potentially be automatically unfair. If you are considering dismissal/change in the workforce following a relevant transfer please contact the 24 Hour Advice Service for additional support.
Under the TUPE regulations, any change to contractual terms which are put into practice following the transfer can in some instances be automatically void, despite whether the employee has agreed to this variation or not.
For more information, or assistance in dealing with the issue of TUPE please contact our Advice Service on 0844 892 2772.