The Transfer of Undertakings (Protection of Employment) Regulations 2006 are generally known as “TUPE”. These Regulations effectively provide obligations on current and new employers when a business transfer takes place (such as a company sale or merger) and employees, are transferred. This situation can occur when a business, or part of a business, is merged or sold.
TUPE essentially means that employees are entitled to transfer to the new employer with their existing terms and conditions being “protected”. It means that if an employee was employed directly before the transfer, they automatically become an employee of the new employer, unless they object to being transferred and notify either employer. An employee’s continuity of employment remains unbroken, and they retain all the rights and obligations under their contract of employment with their former employer. It also means that an employee cannot be lawfully dismissed in connection with the transfer (except in limited circumstances) and that they and their employee representative must be informed (and consulted with) regarding the proposed transfer.
Failure to comply can lead to each employee being awarded up to 13 weeks’ pay in addition to any compensation for unfair dismissal.
There can be costly penalties for employers who fail to comply with TUPE procedures and their obligations. We can advise on the TUPE process and/or any related unfair dismissal claims.
TUPE applies to all businesses in the UK, regardless of size, and number of different types of transfer including:
Under TUPE, the new and old employers have an obligation to inform and consult with the employees (or their representatives) regarding the transfer of their employment and any implications for them. This will involve providing specific details on any measures/ changes and providing time for views to be sought and consultation undertaken.
The outgoing employer also needs to provide the new employer with prescribed information about the transferring employees. Failure to provide that information correctly at least 14 days before the transfer can lead to a claim from the new employer and a tribunal award of at least £500 in relation to each employee affected.
They must also provide employee liability information (details about the transferring employees) to the new employer and ensure that the transferring employees’ terms and conditions are maintained, unless the sole or principal reason for changes is the TUPE transfer itself.
In summary, the employer’s responsibilities include:
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