TUPE is the Transfer of Undertakings (Protection of Employment) Regulations 2006, as amended by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014.
The TUPE regulations can apply when a company is sold, activities are outsourced, brought in-house, transferred or a contract for services is moved from one provider to another.
Employees from the newly-acquired business, service or contract will transfer automatically to the incoming employer. Their terms and conditions of employment (apart from occupational pensions) and continuity of service transfer with them and they also receive certain protection around dismissal and redundancy.
There are impacts for:
When an employee transfers under the TUPE regulations, the following rights and obligations, powers and liabilities also transfer with them to the incoming employer:
Employees who transfer from the outgoing employer to the incoming employer are not regarded as dismissed under TUPE, so a transfer does not trigger an entitlement to redundancy pay or pay in lieu of notice unless there is an actual dismissal.
The incoming employer takes over any collective agreements made by or on behalf of the outgoing employer in respect of any of the transferring employers and which were in force at the point of transfer. These will include terms and conditions of employment negotiated through collective bargaining as well as the wider employment relations arrangements. Examples include the collective disputes procedure, time off facilities, training for union representatives, negotiated redundancy procedures or job security arrangements and flexible working arrangements.
Before Committing to the transfer |
Outgoing Employer: At this stage, the outgoing employer should consider whether to:
Incoming Employer: At this stage the incoming employer should:
Prepare for the Transfer |
Outgoing Employer: At this stage the outgoing employer must:
Incoming Employer: At this stage the incoming employer must:
The Transfer |
Outgoing Employer: At this stage the outgoing employer loses the transferring staff and:
Incoming Employee: At this stage the incoming employer gains the transferring staff and:
After The Transfer |
Outgoing Employer: At this stage the outgoing employer:
Incoming Employer: At this stage the incoming employer:
**At all stages of the TUPE process, the incoming employer should be meeting regularly with affected employees to reassure and support them throughout this process and ensure they understand their rights**
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.
If the reason for the dismissal isn’t the transfer, it won't be automatically unfair but it may still be an unfair dismissal if the employer hasn’t hollowed a proper redundancy or dismissal procedure (see the Disciplinary and Grievance Procedure)
Employees who believe that their Terms and Conditions have been substantially changed, to their detriment before, during or after a transfer have the right to terminate their employment and claim constructive unfair dismissal at a tribunal. TUPE classifies these types of resignations as dismissals. If the sole or principal reason for the change was the transfer, the dismissal will be automatically unfair. If the reason for the change is not the transfer the dismissal will only be unfair if the employer acted unreasonably.
Employers are often able to minimise or prevent redundancies and other dismissals when transfers take place. However, there will be occasions when they cannot be avoided.
Where there are fewer than 20 employees being made redundant within a 90-day period, there is still a legal requirement to consult with employees individually but there are no prescribed time limits in which to do so. Employers must first consult with a recognised trade union where they exist, and if there is no recognised union, then with elected employee representatives.
Some employees may tell their employer that they refuse to transfer. If the employee then wishes to resign before the transfer they should submit their objection to the transfer of their employment to the outgoing employer as this will prevent them from transferring and their employment will cease. In these situations:
They will be treated as having resigned from their current employment. This would usually involve a need for them to work and be paid for their notice period.
In these situations where the resignation is of a valid constructive dismissal, the employee will not be entitled to claim unfair dismissal.
If a transfer has not yet taken place, the outgoing employer may- if they choose- offer alternative vacancies to any employee (objecting or otherwise) who is assigned to the group but does not wish to transfer. If such a decision takes place after the ELI has been provided to the incoming employer, the outgoing employer will need to inform the incoming employer that the employee will no longer be transferring.
If an Employee resigns after the transfer their employment will have already transferred, they will therefore not normally be able to object to the transfer and will be resigning from the incoming employer, However, if an employee had not been told about the TUPE transfer or given the name of the incoming employer, employment tribunals may allow post-transfer objections to be heard, provided they are made as soon as the employee learns of the transfer.
Employers should not assume that an informal protest or grievance is enough of an indication that the employee has both objected and resigned from employment. They should ask for confirmation in writing that the employee has formally objected to the transfer of their employment. Similarly employees should ensure they submit their objections in writing. A record makes it clear the employee has understood the implications of objecting in case there is any subsequent dispute over the matter.
Incoming and outgoing employers must comply with the information and consultation requirements as they can be liable for a failure to consult if employees or representatives challenge this at a tribunal. However, time constraints may make this difficult, particularly when the outgoing employer has no elected representatives in place and has to arrange consultation themselves.
Failure to inform/consult can impact employment relations:
Failure to inform/consult can have legal consequences:
Failure to inform/consult can be expensive for employers: