TUPE is the more common name for the Transfer of Undertakings (Protection of Employment) Regulations. It can apply when there is a transfer of a business or service from one organisation to another. Whilst many employers have heard of TUPE, it is one of those areas that can give rise to some common questions, so what five basic things is it helpful to know?
1. When can TUPE apply?
TUPE can apply in two types of situations, business transfers and service provision changes. In general terms:
- Business transfers: This is where an economic entity transfers, and it retains its identity after the transfer. This commonly occurs where a business is bought or sold.
- Service provision changes: This is where activities are outsourced, taken back in-house or there is a change of contractor. TUPE may apply in these situations if certain conditions are met, including where there is an organised grouping of employees whose principal purpose is to carry out the service activities in question.
TUPE can be a tricky area, so if you have a possible business transfer or service provision change situation it is important to contact Kingfisher Professional Services Ltd for advice.
2. Why does TUPE matter?
TUPE has significant implications for all those involved as it gives rights and protections to affected employees as well as placing obligations upon employers. A failure to recognise where TUPE applies can in some cases lead to employees being able to complain to an employment tribunal about how they have been treated, for example that they have been automatically unfairly dismissed in connection with the transfer, that they have been constructively dismissed or that their rights have otherwise been infringed, such as where impermissible detrimental changes are made to the terms and conditions of an employment contract.
3. What are some of the key effects of TUPE?
Where TUPE applies, it is important to be aware that amongst other things:
- Affected employees will automatically transfer from the old employer (the transferor) to the new employer (the transferee), unless the employee objects.
- In respect of the employees, the transferee will take over the rights and liabilities of the transferor, save for a few exceptions.
- Employees terms and conditions are protected. There are very limited circumstances in which these can safely be changed.
- Employees are protected from being dismissed because of the transfer; such dismissals are automatically unfair.
4. What is the employee liability information the transferor needs to provide?
Where TUPE applies, the transferor must provide the transferee with ‘employee liability information.’ This must be done at least 28 days before the date of the transfer. It is important for transferees to ensure they get the employee liability information as it will help them to determine whether they want to take on the business/contract.
The employee liability information that must be provided is:
- The identity and age of the employee;
- Information contained in the ‘statement of employment particulars’ i.e. information contained in their contracts of employment;
- Information relating to any collective agreements which apply to the employee and will continue to have effect after the transfer;
- Any disciplinary action taken against an employee within the preceding two years;
- Any grievance procedure taken by an employee in the preceding two years;
- Any legal actions (such as a tribunal claim) taken by the employee against the employer in the preceding two years, or any potential legal actions in which there are reasonable grounds to believe may be brought.
Transferors must provide this information about any employee who is expected to transfer from their employment to the transferee’s employment. If the transferor has dismissed an employee before the transfer, they will also need to provide the transferee with employee liability information about that employee where the dismissed that employee was because of the transfer, or where they dismissed the employee for a reason connected to the transfer which was not an economic, technical or organisational reason ‘entailing changes in the workforce’.
If you have a query regarding employee liability information or would like a covering letter regarding the provision of employee liability information, please contact your Employment Law Specialist who will be happy to help.
5. Are there information/consultation requirements?
There are rules regarding informing and consulting about the transfer, which in most cases is usually undertaken with employee representatives. If there are not already appropriate representatives in place, such as a recognised trade union, an election may need to be held to appoint representatives specifically for TUPE purposes.
It is important to be aware that if you breach your information and consultation obligations, an employment tribunal can award up to 13 weeks’ gross pay for each affected employee.
Whilst TUPE may seem daunting and there can be much to think about, whether your organisation is the potential transferor or transferee, remember, Kingfisher Professional Services Ltd is here to help. If you think your organisation may have a TUPE transfer situation, please contact us for advice.
If you have an employment law matter you would like assistance with, please do not hesitate to get in touch as we are happy to help.