Transfer of Undertakings (TUPE)

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What is TUPE?

‘TUPE’ is an acronym for the Transfer of Undertakings (Protection of Employment) Regulations 2006. When the whole or part of an employer’s business or undertaking is sold or transferred as a going concern to another employer, there is a TUPE transfer. A TUPE transfer may also consist of a “service provision change“. This is where business activities are outsourced to an external contractor, brought back in-house, or where there is a change in the contractor carrying out such activities.

The purpose of TUPE is to protect you as an employee during a transfer. As an employee of the newly-acquired business or activity, you will transfer automatically from your old employer to the buyer (your new employer). Your terms and conditions of employment and continuity of service transfer over to your new employer, and are preserved. You are also protected from dismissal because of the transfer. TUPE is a huge and complicated piece of legislation. If there is no trade union in your workplace contact the TUC for advice. You can also set up an Employee Representative Forum and take advice using the resources below. An Employee representative is an employee who speaks officially for an employee or group of employees and represents them in employer forums such as managers meetings, disciplinary proceedings, redundancy situations and transfers of undertakings.[ see Employee Representative Guide for non-union workplaces]

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Definition of ’Employee’

Employees are defined in Regulation 2(1) as;  ‘any individual who works for another person whether under a contract of service or apprenticeship or otherwise but does not include anyone who provides services under a contract for services‘.  TUPE therefore applies to all employees, apprentices and possibly workers (including casual workers). It does not apply if you are self-employed or an office holder (such as a Director).

TUPE does not apply where the change of ownership of a business is by change of ownership of the shares in the limited company which owns the business, or where the business is being sold by the liquidator of an insolvent company.

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Amendments to TUPE

The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 amend various provisions of TUPE. For transfers that took place on or after 31 July 2014, a further amendment allows micro-businesses to inform and consult directly with affected employees but only if there is neither a recognised independent union,  nor any existing employee representatives and the employer has not invited affected employees to elect representatives. It is a good idea to organise representation if there is no recognised union in your workplace. You can contact the TUC for advice or set up an Employee Representative Forum in your workplace.[ see Employee Representative Guide for non-union workplaces]

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Unfair Dismissal

Under Reg.7(1) (as amended), any dismissals will be automatically unfair where the sole or principal reason for the dismissal is the transfer unless it is for an economical, technical or organisational reason (an “ETO” reason) requiring a change in the workforce.  Where the sole or principal reason for the dismissal is an ETO reason, the dismissal will be potentially fair providing it meets the ordinary requirements of fairness in s98 Employment Rights Act 1996.

If you are being treated unfairly at work, use the Grievance Builder to raise a grievance or the ET1 Builder to complain in the Employment Tribunal

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Information and Consulation

Employers involved in a business transfer must inform appropriate representatives of the affected employees of the transfer and any measures proposed, and must consult on any proposed measures. Certain specified information must be provided to the representatives long enough before the transfer to enable the outgoing employer to consult with them about it.

If there are any changes or proposals for changes following the transfer, these “measures” will have to be discussed with the representatives of the affected employees. The incoming employer is required to provide the outgoing employer with information on proposed measures to allow the outgoing employer to comply with its duty to inform and consult. Businesses with fewer than 10 staff are allowed to inform and consult directly with employees where there are no pre-existing employee representatives who are recognised.

If your employer does not inform and consult you, you can make a complaint to the Employment Tribunal. The Tribunal can award compensation up to a maximum of 13 weeks’ pay to each affected employee. [ see Employee Representative Guide for non-union workplaces]

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Liability

If a dismissal is wrongful or unfair, you can pursue the matter in the Employment Tribunal or courts. The new employer is usually responsible for paying any subsequent award of damages, and/or compensation for unfair dismissal.

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Your Right to Object to the Transfer

You have a right to object to being transferred under Regulation 4(7).

If you object in writing;

Your employment contract is terminated, but you are not treated as having been dismissed and you will have no right to compensation – Regulation 4(8)

Unless….

the transfer involves, or would involve, a substantial change to your working conditions which would be to your ‘material detriment’. In such a case you would be treated as having been unfairly dismissed – Regulation 4(9)

Or…

you have a right to terminate your employment without notice because of an actual or threatened fundamental breach of contract by your employer and can therefore claim that you have been constructively unfairly dismissed – Regulation 4 (11)