One of the areas we often get asked about is TUPE – the Transfer of Undertakings (Protection of Employment) Regulations. Managers sometimes find themselves thrust into a TUPE situation with little or no experience of this area and are worried about what they need to do.
So, what are some of the top tips that can help your business?
- Have an awareness of what TUPE is
- Be alert to some common situations where TUPE may apply
- Know what steps to take and when
- Avoid this key mistake
Have an awareness of what TUPE is
In brief, TUPE is designed to protect the rights of employees in the event of a change of employer, for example, on the sale of a business. If TUPE applies, the employment of the relevant employees will automatically transfer from the current employer (the Transferor) to the new employer (the Transferee) on their existing terms, with the Transferee taking over most of the rights and liabilities the Transferor had in respect of those employees.
As you would expect, TUPE provides protection for employees, for example, it’s automatically unfair to dismiss an employee who has at least two years’ continuity of service if the sole or principal reason for the dismissal is the transfer.
It’s also important to be aware that employers are required to take certain practical steps where TUPE applies.
Be alert to some common situations where TUPE may apply
If an employer buys or sells a business or part of one, or there is a service provision change -in-sourcing, outsourcing of activities (e.g. cleaning, IT, security) or a change in the contractor responsible for carrying out an activity for a client, TUPE may apply.
Working out if TUPE applies to your situation can sometimes be tricky so it’s always important to be on the look-out and to contact us for advice on your circumstances. If you keep TUPE in mind, you’re more likely to spot it and to do so in good time.
Know what steps to take and when
There are some steps that TUPE requires businesses to take before the transfer, these include:
- Employee liability information – if you are the Transferor, you are legally required to provide the Transferee with certain information at least 28 days before the date of the transfer, such as that regarding terms and conditions of employment and whether any grievances have been raised by employees in the last two years. Amongst other things, the employee liability information helps the Transferee to identify whether they still wish to take on the business/contract and what the liabilities are, so if you are the Transferee, it’s important to make sure you get this.
- In most cases, employees who are affected by the proposed transfer will need to be provided with certain information, and consultation may also be required. This will need to be via appropriate employee representatives in some circumstances, for example, if you recognise a trade union or the TUPE transfer is ‘large scale’ (this situation often involves an election, as many businesses don’t already have appropriate representatives in place). Employers can choose to inform (and if necessary consult) directly with affected employees if they are an employer with fewer than 50 employees or the transfer involves fewer than 10 employees (irrespective of the size of the employer) provided there are no existing appropriate representatives and employees haven’t been invited to elect any.
- The Transferee is required to tell the Transferor whether they are proposing to take any ‘measures’, such as making redundancies. If measures are proposed, consultation will need to be carried out in addition to providing the required information, this is to comply with obligations under TUPE and normal employment law rules. Measures and the need to consult can impact your plans and potential timelines so it’s important to bear this in mind. When it comes to TUPE consultation, we usually recommend that the Transferor and Transferee carry out consultation jointly. If measures are proposed, it will be important to get in touch for advice on the situation you are dealing with
Did you know employees can object to their employment transferring to the Transferee? If you are the Transferor and an employee indicates that they are considering objecting, it’s usually good practice to meet with them to understand their reasons for this. You should seek specific advice on the facts of your case and what steps to take in relation to the employee going forward.
Avoid this key mistake
Businesses aren’t always aware that transferred employee’s terms and conditions are protected and there are very limited circumstances in which these can usually safely be changed. This can come as a nasty surprise for Transferees who may have been hoping to make changes such as reducing benefits or pay, for example to make a business / contract more profitable. To make the situation trickier, there isn’t a ‘waiting period,’ (e.g a year) post transfer after which changes can more easily be made.
Businesses can find themselves in hot water if they make changes (or try to) where it is not legally permitted. If you wish to make any changes to transferred or transferring employees’ terms and conditions, please contact us for advice regarding the changes you wish to make.
If your business is involved in a TUPE transfer situation, we can help lighten the load and save you time and effort. Whether you need advice on steps to follow or help with HR aspects such as correspondence for the provision of information to employees please get in touch.