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TUPE Advice for Employers

 In the current economic climate as businesses are bought and sold out of administration, TUPE is a highly relevant area of employment law. Here’s we highlight the basics about TUPE and its impact.

What is TUPE?

‘TUPE’ is the abbreviation for The Transfer of Undertakings (Protection of Employment) Regulations 2006. TUPE protects the rights of employees when the business that they are employed by is transferred into new ownership.

TUPE means that the new business is legally recognised as the employer of staff transferred and ensures that they maintain continuous service and the same contractual terms and conditions of employment.

When does it apply?

There are two forms of transfer under TUPE protecting employees.

A ‘business transfer’ is the transfer of an economic entity. In simple terms TUPE applies when a number of employees are transferred from one business to another. Typically this is the case when a business is acquired.

A ‘service provision change’ applies to a range of situations where work is reassigned. For example, when catering or security is outsourced to a contractor and the jobs no longer exist within the organisation.

Can the terms and conditions of transferring staff be changed?

Businesses that acquire new employees under TUPE may wish to amend the terms and conditions of the new staff to bring them into line with those of existing employees.

Making a variation to the employment contracts of transferring staff may be allowed but only if it is unconnected with the transfer or where there is an ‘economic, technical or organisational’ (ETO) reason for the variation that entails changes in the workforce.

Although the TUPE Regulations do not define what constitutes an ETO reason, there is guidance that ETO reasons are likely to include profitability of the business, the processes which the new employer operates, or matters regarding the management or organisational structure of the new employer's business.

What impact does TUPE have on the ability to dismiss staff?

The tribunals automatically deem it unfair to dismiss new or existing staff because of the transfer situation alone. If the dismissal is for a reason connected with the transfer, it will be automatically unfair except in the case of an ETO reason that involves changes to the workforce.

In conclusion, anyone who finds themselves in a situation where TUPE might apply should seek specialist legal advice before making any potentially costly decisions.

For further advice please contact Christina Reed on 0800 310 2000 or email christinareed@vslaw.co.uk

For any enquiries regarding TUPE Advice for Employers please contact our Commercial Law Solicitors department on 0800 310 2000
Or enquire online here.