Anaya Nolan
TUPE is the UK's implementation of the European Union Transfer of Undertakings Directive, protecting employees whose business is being transferred to another business. The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) are an important part of UK labour law, ensuring that employees are entitled to the same terms and conditions of their initial employment, including continuity of service. This means that when a business is transferred, employees' jobs usually transfer over to the new company, and the new employer cannot change an employee's terms and conditions unless there is an economic, technical or organisational reason.
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What You'll Learn
Employees' rights and benefits
TUPE, or the Transfer of Undertakings (Protection of Employment) Regulations, is an important part of UK labour law that protects employees when a business changes ownership. It ensures that employees' jobs are protected when a business is transferred to another business. This means that employees' roles and contracts are continued under the new business.
TUPE protects employees' rights and benefits when a business changes hands. It ensures that employees have the legal right to transfer their existing terms and conditions of employment, including their employment rights and liabilities. For example, if an employee had enhanced holiday entitlement under their old contract, TUPE would protect this entitlement when transferring to the new business.
TUPE also applies to occupational pension schemes, although there may be special provisions in some cases. Employees are also protected under TUPE in the event of a business becoming insolvent and being taken over by another company. In this case, employees can still claim any money owed to them by the insolvent company, and the new employer is required to pay any outstanding balance.
TUPE applies to businesses of all sizes and in both the public and private sectors. However, it is important to note that transfers within the public sector are not usually covered by TUPE, unless there is a transfer from the public to the private sector. In the case of a business transfer, the identity of the employer must change for TUPE protection to apply.
TUPE regulations also state that an employer cannot choose which employees they want to transfer—all employees assigned to the business or part of the business being transferred will automatically transfer with it. This includes situations where a company decides to outsource a particular service, such as cleaning or catering, and the employees providing that service are likely to be protected under TUPE.
Overall, TUPE provides important protections for employees' rights and benefits during business transfers, ensuring that their existing terms and conditions of employment are maintained under the new employer.
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Employer responsibilities
TUPE, or the Transfer of Undertakings (Protection of Employment) Regulations, is a UK labour law that safeguards employees when a business or part of it is transferred to another business. This law applies to businesses in the UK, regardless of their size, and covers both the public and private sectors, as well as charities.
When it comes to employer responsibilities, TUPE regulations outline the following key points:
Old Employer (Transferor) Responsibilities:
- The old employer must comply with TUPE regulations and ensure a smooth transfer of employees to the new employer.
- They must provide employee liability information to the new employer, including details of the transferring employees, their contracts, and any collective agreements.
- They are responsible for informing and consulting with the transferring employees about the transfer, including providing written details and allowing time for discussion.
New Employer (Transferee) Responsibilities:
- The new employer must also comply with TUPE regulations and honour the transferring employees' existing terms and conditions of employment.
- They cannot dismiss employees or change their terms and conditions unless there is a valid reason, such as an "economic, technical, or organisational" (ETO) reason, and even then, the employee's agreement is typically required.
- The new employer must recognise the transferring employees' continuous service, including their start date and any accrued rights, such as holiday entitlement.
- They must also assume responsibility for any claims made by employees against the old employer, such as discrimination or breach of contract.
General Employer Responsibilities:
- Both the old and new employers should work together to ensure a seamless transition for the employees.
- Employers cannot choose which employees to transfer; all employees assigned to the transferring business or part of it will automatically transfer.
- Employers can make changes to terms and conditions if allowed by the employee's existing contract and if the transfer itself is not the reason for the change. Any changes must be agreed upon by the employees or their representatives.
- Employers should be aware that employees have the right to object to the transfer or resign and claim unfair dismissal if their working conditions significantly worsen due to the transfer.
Overall, TUPE regulations aim to protect employees' rights and ensure that their employment is substantially continued through business transfers, with employers bearing the responsibility of upholding these protections.
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Business transfers
TUPE, or the Transfer of Undertakings (Protection of Employment) Regulations, is a UK labour law that safeguards employees when their business is transferred to another company. This applies to both the private and public sectors, as well as charities. The law ensures that employees' jobs are usually transferred to the new company, with the same terms and conditions of their initial employment, including continuity of service.
A business transfer occurs when an organisation, or part of it, is transferred from one employer to another. This could be a large organisation with many employees or a small business with just one employee. The part of the business being transferred must be in the UK for TUPE to apply.
There are two types of transfers protected under TUPE regulations: business takeovers and service provision changes. A business takeover occurs when a business or part of it is transferred from one employer to another. On the other hand, a service provision change involves transferring a contract to a new provider. This can happen through outsourcing, insourcing, or retendering.
Before a transfer, employers must consult with trade unions, employee representatives, and all those affected by the proposed transfer. Employees should be informed of the transfer, including when and why it is happening, and how it will impact them. After the transfer, employees should receive an up-to-date written statement confirming their employment with the new employer and stating that their terms and conditions remain unchanged.
TUPE regulations also outline specific protections for employees. For instance, if an employee's working conditions significantly worsen due to the transfer, they can object or resign and claim unfair dismissal. Additionally, the new employer cannot change an employee's terms and conditions because of the transfer unless there is an economic, technical, or organisational" reason.
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Service provision changes
TUPE, or the Transfer of Undertakings (Protection of Employment) Regulations, is a UK labour law that protects employees when a business or service is transferred to another business. A service provision change (SPC) occurs when a service is transferred to a new provider, for example, when a company takes over a contract for office cleaning from another company.
For TUPE to apply to an SPC, there must be an organised grouping of employees carrying out the relevant activities, and the activities carried out by the new supplier must be 'fundamentally the same' as those of the outgoing supplier. The change in service provider must not be limited to a single event or task of short duration and must not be limited to the supply of goods.
In the case of an SPC, the old and new employers have obligations to comply with to ensure a smooth transition for the affected employees. This includes informing employees who may be affected by the transfer, as well as recognised trade unions, and consulting with those affected employees. If there is an intention to vary contracts or dismiss affected employees, it is advisable to seek legal advice to assess whether there is an "Economic, Technical or Organisational" (ETO) reason for the change.
TUPE can be complex, and it is important for employers to be aware of their obligations and for employees to understand their rights.
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Employee objections
TUPE, or the Transfer of Undertakings (Protection of Employment) Regulations, is a UK labour law that protects employees whose business is being transferred to another business. TUPE ensures that, in connection with the transfer, employment is protected, i.e. substantially continued.
Employees cannot be forced to transfer their employment to a new employer. However, if they choose not to transfer, their options are limited. If an employee objects to the transfer, it is essentially treated as a resignation, and the employer is not obligated to pay notice pay. The employee cannot claim redundancy pay and, except in limited circumstances, cannot claim unfair dismissal.
In the case of London United Busways Ltd v Marchi, a bus driver employed by LUB objected to his employment being transferred to another bus firm, Abellio, as it would involve a one-hour commute each way to his place of work. He indicated that he wished to be made redundant and would not accept employment with LUB on new terms. LUB responded that this was not an option and that if he objected, his employment would end on the transfer date. The employee maintained that he was still employed by LUB after the transfer date, but LUB refused to acknowledge this, and Abellio terminated his employment. The tribunal found that LUB had dismissed the employee on the transfer date and held them liable for the dismissal.
This case highlights the complexity of employee objections to TUPE transfer and the allocation of liability. It clarified that an employee need not expressly cite material changes in working conditions to their detriment as the reasons for their objection. If they do object in any terms, they will be deemed to have been dismissed by the transferor.
Employees can also object to the transfer or resign and claim unfair dismissal if their working conditions significantly worsen because of the transfer. TUPE regulations mean employees should not lose their existing employment rights, and the new employer cannot change an employee's terms and conditions if the reason is the transfer itself. The new employer can, however, change these terms and conditions if there is an 'economic, technical or organisational' (ETO) reason and the employee agrees to the change.
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Frequently asked questions
TUPE stands for Transfer of Undertakings (Protection of Employment).
The TUPE law protects employees' rights and benefits when a business is transferred to another business. It ensures that employees are entitled to the same terms and conditions of their initial employment.
TUPE applies to employees of businesses in the UK. The size of the business does not matter. The business could have its head office in another country, but the part of the business that is transferring ownership must be in the UK.
There are two types of transfers protected under TUPE: business takeovers and service provision changes. A business takeover occurs when a business or part of a business is transferred from one employer to another. A service provision change involves outsourcing, insourcing, or assigning to a new contractor.
