Published 8th December 2020
TUPE is the abbreviation for the statutory provision “Transfer of Undertakings (Protection of Employment) Regulations 2006”. It aims to provide provisions to safeguard employees’ rights in the event of transfers of undertakings, businesses or parts of businesses.
The TUPE regulations can apply when a company is sold, its activities are outsourced, brought in-house, transferred or a contract for services is moved from one provider to another.
Employees from the seller, service or contract (the “transferor”) will transfer automatically to the incoming employer (the “transferee”). Affected employees’ terms and conditions of employment and continuity of service transfer with them and they also receive certain protections around dismissal and redundancy.
When would TUPE not apply?
It is not a straightforward answer when TUPE would not apply. It’s specific to individual circumstances, however, it will generally not apply where there is:
- Change of company name: If the name of the company changes but there is no change in the entity in terms of ownership of the company or its working practices, then, in general, this would not be a TUPE situation.
- Transfers of shares.
- Transfers between public administrations.
- Transfers of assets where there is no transfer of the business as a going concern.
- Where the undertaking to be transferred is situated outside of the UK.
What is protected under TUPE?
Under TUPE regulations employees should not lose their existing employment rights. Employees have the legal right to transfer to the new employer on their existing terms and conditions of employment and with all their existing employment entitlements and liabilities.
An employee keeps the right to bring a claim against their employer for unfair dismissal, redundancy or discrimination, unpaid wages, bonuses, holidays or personal injury claims, on the condition that these are impacted by the transfer.
TUPE also provides a greater amount of protection against dismissal over and above general unfair dismissal for employees with more than two years’ service. Dismissals will be automatically unfair if the sole or principal reason for the dismissal is the transfer itself. . If the reason for the dismissal is considered to be an ‘economical, technical or organisational reason’ that ‘entails changes in the workforce’, then the employer may be able to defend such automatic unfair dismissal claims, but there may still be unfair dismissal claims.
- Economic reasons relate to how the company is performing financially.
- Technical reasons refer to the equipment or processes the company uses.
- Organisational is any reasons relating to the structure of the company.
Can I be sacked after TUPE?
Therefore, as above, if an employee is dismissed by either the outgoing or incoming employer before or after a transfer and the sole or principal reason for the dismissal is the transfer, it will be automatically unfair. An employee with over two years’ service will be able to claim on this basis.
If the reason for the dismissal isn’t the transfer (and instead an employer can show an economic, technical or organisational reason, it won’t be automatically unfair, but it may still be an unfair dismissal if the employer has not followed a fair procedure.
Can my contract be changed after TUPE?
The changes to a contract cannot be because of the transfer. An employer can make changes to the terms and conditions of their employee’s contract if the employee’s existing contract allows for those changes, if the reason is considered to be an ‘economic, technical or organisational reason’ (as above). Where there are no such reasons, the employee may be able to claim a breach of TUPE or resign and claim constructive unfair dismissal, depending on the extent of the breach.
Do I have to accept a TUPE transfer?
Employees can refuse to work for the new employer. This would be considered as resigning from their position in the company. Notice is not required, however. The employee simply tells the employer, or the new employer, before the transfer happens that they refuse to accept the transfer. The employee’s employment contract will then end at the time of transfer.
Under these circumstances, they will not be able to claim unfair dismissal or redundancy pay, however.
Can an employer refuse TUPE?
TUPE is mainly provided to protect employees rather than an employer. Therefore, there are circumstances when an employer may want to structure a transfer so as to avoid the protection that TUPE provides, such as because it limits viable business purchases. However, generally, an employer cannot just “opt out” of TUPE.
What is the process for TUPE?
Where employees are subject to TUPE, the employees should be informed of the potential sale and transfer of the company before it takes place. Those employees should then be allowed to appoint an employee representative or consult with their union.
The employer should then inform and consult representatives and employees about the transfer and who will be transferring. From a corporate transference perspective, the transferor has to provide “employee liability information” to the transferor.
When the transfer takes place, it is good practice for a new employer to introduce themselves to the new employees who transfer to them, to preserve good morale.
Any other questions?
From tribunal claims to draft grievances and appeal letters, we know how daunting the legal process can be for employees, we are here to help. If you’re in the middle of a TUPE process, we can review whether all obligations are being followed and where you have been dismissed as a result of the process, we can assist on those unfair dismissal claims. We will take off your case from start to finish ensuring you know exactly where you stand.
We can also support individuals by negotiating settlements agreements with your employer to get the best possible outcome for you. We provide these services whilst being completely transparent as possible with you about the legal cost.
Before commencing work on your behalf, we shall do an initial review and then inform you of any additional costs and ensure you fully understand how your legal fees are calculated, in writing, before proceeding with any case.
Whilst most firms operate on an hourly rate, we prefer to offer our clients a fixed fee (wherever possible) to assist our clients in managing their legal costs.
Please note this blog is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action. Please contact us if you have any questions on firstname.lastname@example.org