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 happens when a UK business or part of it changes ownership but keeps its identity.

For example, if a shopping centre is sold but operates the same way, its management and maintenance staff may transfer to the new owner or 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.

TUPE can apply regardless of the business or service size. It applies in both the public and private sectors, regardless of 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 ensures the employment relationship continues seamlessly. The transferee (‘buyer’) takes over from the transferor (‘seller’), inheriting all employee-related rights, duties, and liabilities.

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 prevent dismissal due to the transfer, except for economic, technical, or organisational (ETO) reasons.

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 limit employers from changing the terms and conditions of transferring employees. Exceptions apply in specific cases, 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