The TUPE Process Of Employers
The Transfer of Undertakings Protection of Employment Regulations (TUPE) 2006 require that when a business is transferred or a service provision is changed, that the new employer step into the shoes of the old employer.
The TUPE process of Employers
The Transfer of Undertakings Protection of Employment Regulations (TUPE) 2006 require that when a business is transferred or a service provision is changed, that the new employer step into the shoes of the old employer. Also that the contracts and terms (and continuity of employment) of the existing employees’ contracts remain.
A business transfer takes place when a business or part of a business moves from one employer to another. This can include when companies merge or when one company sells its assets to another company. In these circumstances the identity of the employer has changed. If the shares of a company are bought out by someone then this would not usually give rise to a TUPE transfer.
Service provision change
A service provision change is when a service that has been provided in-house, such as a cleaner who has been employed by the company, is instead given to a contractor (or vice versa). Or, if one contractor’s contract has ended and another takes over the service. In both of these situations, the people employed to do the job will transfer and still complete the job they are doing.
TUPE transfers do not take place when there is a change in a supply of goods or in relation to a single event or short term task.
Who do you need to inform?
You must inform your employees (and their trade unions where applicable) that the transfer is taking place. You must inform them when the transfer is going to happen and the reasons for the transfer taking place.
You must specify how the transfer is likely to affect them. For example, that they will no longer be employed by company X and will instead report to and be employed by company Y.
You must also inform staff whether there is going to be any reorganisation of the company and whether any agency workers are being used. Agreement to any changes from any involved trade unions should be sought.
Information for new employers
If you are the new employer then you will be responsible for the employees as if you were the old employer. This means being responsible for any issues that happened when you were not the employee’s employer and you should ensure that you have obtained warranties from the old employer in relation to their handling of employees.
Terms and conditions
All employees are entitled to remain on the same terms and conditions of their contract as they had before the TUPE transfer took place and their continuous service will not be affected by the transfer – meaning that their start date of employment will remain the same.
Opting out from TUPE
Employees may choose not to transfer under TUPE. This is essentially the same as the employee resigning from their position and in most instances they will not be entitled to any redundancy pay (although this varies depending on the situation).
Making changes TUPE
An old employer cannot change an employee’s contract in anticipation of a TUPE transfer to make it more attractive to a potential buyer. Also the new employer cannot change the terms of the contract for reasons that relate solely to the transfer itself.
The new employer can make changes if there is an economic, technical or organisational reason for doing so. This could be to do with the performance of the company, company equipment or processes of the structure of the company.
Contractual terms can be improved but should be agreed with the employees in the first instance.
After a transfer
After a transfer has taken place the new employer should provide the employees with an updated written statement of employment specifying the name of the new employer and that all terms and conditions of employment have not changed.