AN EMPLOYER’S GUIDE TO TUPE
A business transfer can create a sense of confusion and stress for employers and employees. Where the legal criteria are met, employers must comply with TUPE regulations to ensure lawful workforce management and protect employee rights during the transition. So what is TUPE, and when does it apply? In this helpful guide for employers, we’ll assess what TUPE is, how it works and the practical steps an employer should take to ensure a smooth and compliant transition.
On This Page
WHAT IS TUPE?
TUPE stands for the Transfer of Undertakings Protection of Employment Regulations. It is UK legislation that is in place to protect employees when a business, or part of a business, transfers to a new employer.
Its purpose is to protect employees’ rights and ensure that existing terms, continuity of service and associated employment liabilities transfer to the new employer.
WHEN DOES TUPE APPLY?
TUPE applies to organisations of all sizes where the legal criteria for a relevant transfer are met. These include a business transfer, where an economic entity moves from one employer to another and retains its identity. It can also apply to a service provision change, such as outsourcing a service or switching from one contractor to another.
For TUPE to apply, there must be an organised grouping of employees whose principal purpose is carrying out activities that are transferring. Each situation must be reviewed carefully to determine whether the regulations are triggered.
UNDERSTANDING TUPE
It is the responsibility of the employer to manage a TUPE transfer properly and understand their legal duties at each stage of the process. Carrying out thorough due diligence helps identify workforce structure, contractual terms, ongoing disputes and potential liabilities before the transfer takes place.
Consulting and Informing
Both the outgoing and new employers must inform affected employees regarding the business transfer. Employees are required to inform employees about a transfer even if no changes are going into effect.
If there are changes to working practices, then consultation must also take place. This involves addressing any changes and considering feedback from affected employees.
What if an Employee Doesn’t Want To Work For The New Employer?
Employees have the option to refuse the transfer. In these instances, an employee who refuses to transfer relinquishes the right to redundancy pay and unfair dismissal. An employee who does not want to transfer is obligated to inform their current employer.
If an employee chooses to refuse the transfer, the employer still needs to explain what will happen and ensure they have all the information before making a final decision.
This should be treated in the same way as a resignation. The employer should confirm the employee’s notice requirements in line with their contract and ensure that any outstanding salary, accrued holiday pay and other contractual payments are settled correctly.
After the Transfer
After the transfer has taken place, the old and new employers no longer have to inform and consult employees. However, they must consult if they plan to institute any changes to work practices or if redundancies are being considered.
The old employer should regularly speak with employees who did not transfer to support them throughout the process and maintain consistent performance. The new employer should hold regular team meetings to ease any concerns and integrate any new team members. Most importantly, the new employer should check with their employees to ensure they understand the terms which were transferred over with them.
Dismissals
Dismissals where the primary reason is the transfer itself are automatically unfair under TUPE. This applies to both the outgoing and incoming employer, as it can result in employees filing a claim for unfair dismissal.
Redundancies can be considered lawful if there is a genuine economic, technical or organisational reason that entails changes in the workforce. A fair process must be followed, including consultation and objective selection criteria where relevant. Employers who fail to follow a fair procedure may face claims for unfair dismissal and associated financial penalties.
Best Practices
The best way to ensure a smooth business transfer in any TUPE situation is to take proactive measures. Employers should review the workforce structure, contractual terms and potential liabilities. Clear communication is also considered good practice as it can ease any concerns and reassure employees during a period of transition.
Most importantly, seeking professional HR support can protect an organisation from costly disputes. An experienced HR team can help with overseeing the entire process and ensure all legal obligations are met. This can help reduce the chance of disputes, claims or disruption.
EMPLOYMENT LAW WITH CLOVER HR
A TUPE transfer can be challenging for any employer. There are many aspects to oversee a smooth transition and it’s vital to keep employees informed and up to date. Don’t risk getting blindsided by unforeseen claims or costly legal disputes.
The expert consultants at Clover HR are here to help oversee business transfer and provide tailored advice at every stage. Contact our helpful team to discuss your situation and protect your business. Give us a call on 0330 175 6601 or email us at info@cloverhr.co.uk.
FREQUENTLY ASKED QUESTIONS
Which Employees Are Protected Under TUPE?
Employees assigned to the organised grouping of resources or employees who are transferring are protected under TUPE. Essentially, employees who mainly work in the team or part of the business that is moving to a new employer are protected under TUPE.
Can Terms and Conditions be Changed After TUPE?
Yes. Terms and conditions can be changed but they are heavily restricted. Changes are possible where there is a valid economic, technical or organisational reason.
What is Employee Liability Information?
Employee liability information is a set of details that the old employer must provide to the new employer before the transfer. It includes information about employees who are moving across. This information includes contacts, pay, benefits and any disciplinary action or grievances on record. It provides the new employer with a better understanding of the responsibilities they are taking on.
Who is Responsible for Employee Liabilities After Transfer?
After the transfer, the new employer becomes responsible for most employment liabilities connected to the transferring employees. This includes contractual obligations and potential claims, except in limited circumstances where liability is specifically retained by the outgoing employer.
Talk To One of Our Experts