TUPE – Tackling it Together

TUPE – The Transfer of Undertakings (Protection of Employment) Regulations are a hot topic with many employers engaging in business sales/purchases or being involved in service provision changes, such as the outsourcing of activities (e.g. cleaning). If these sound like something your business is or will be involved in it will be important to be aware of TUPE and the implications if it applies.

Whilst those of you that have heard of TUPE may find the thought of dealing with the duties that come with it daunting, remember we are here to help and we can tackle it together. Whether you are new to TUPE or not, here’s four key things your business needs to know:

1. What is TUPE and why does it matter?
2. What are some common situations in which TUPE may apply?
3. What are some of the key pre-transfer steps?
4. What should the first step be if you think you have a TUPE situation in your business?

1. What is TUPE and why does it matter?

In outline, 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.

2. What are some common situations in which 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, I.T, 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 alert and to contact us for advice on the circumstances of your situation. If you keep TUPE in mind, you’re more likely to recognise it should it apply and to do so in good time. 

3. What are some of the key pre-transfer steps?

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 the information you are entitled to.
• 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) providing 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 it 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 specific advice on the situation you are dealing with.

4. What should your first step be if you think you have a TUPE situation in your business?

You should get in touch with us as soon as possible for advice on the facts of your case and for support with matters such as the steps to follow and assistance with supporting HR documentation such as correspondence with employees. If you are going to be the Transferee and are considering taking measures such as proposing redundancies or changing terms and conditions it will be especially important to seek advice before taking action as these can be areas fraught with difficulty. 

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