Demystifying TUPE

The Transfer of Undertakings (Protection of Employment) Regulations 2006 are intended to protect employees in the event that the work they do is transferred to a different employer. In this blog, we will explore exactly what that means and how it can impact employment rights.

When does TUPE apply?

It is firstly worth being aware that TUPE only applies in circumstances where there is a ‘relevant transfer’. The two main scenarios are where there is a business transfer or a service provision change.

A business transfer occurs when an undertaking, business, or part of an undertaking or business situated in the UK is transferred to another person, provided that the economic entity retains its identity post-transfer.

For example, if a shopping centre is sold and continues to operate in the same manner, the employees involved in the management or maintenance of the property may be transferred to the new owner or managing agent.

A service provision change involves situations such as outsourcing, insourcing, or changing the contractor providing a service. For TUPE to apply in these cases, the activities carried out by the new provider must be fundamentally the same as those carried out by the previous provider. Additionally, it must be intended that these activities continue beyond a single specific event or short-term task.

For instance, if a cleaning firm is replaced by another contractor, the employees of the original firm may transfer to the new contractor.

Furthermore, TUPE can apply regardless of the size of the business or service being transferred, whether it is in the public or private sector, and irrespective of any profit motive.

How does TUPE protect employment rights?

TUPE protects employment rights by ensuring that employees’ contracts of employment are automatically transferred when a relevant transfer occurs. This means that the employment relationship continues seamlessly, and the transferee (‘buyer’) steps into the shoes of the transferor (‘seller’), inheriting all rights, powers, duties, and liabilities associated with the employees’ contracts.

TUPE preserves the continuity of employment and the terms and conditions of employment for the transferring employees. This includes the automatic transfer of employees, along with their contracts of employment, to the transferee. The regulations also protect employees from dismissal if the reason for the dismissal is the transfer itself, unless there is an economic, technical, or organisational (ETO) reason.

Additionally, TUPE imposes significant consultation obligations on both the transferor and the transferee. This ensures that employees are informed and consulted about the transfer and any measures that may affect them. The regulations also restrict the ability of employers to change the terms and conditions of employment of transferring employees, except in specific circumstances such as insolvency.

Conclusion

In summary, TUPE exists to protect employee’s rights during relevant business transfers, ensuring that they are as unaffected as possible, so it is vital that businesses understand their obligations during such transfers and when exceptions may apply.

For help and advice on the impacts and recommended steps for a TUPE transfer, please do not hesitate to contact our Employment team at employment@mlplaw.co.uk