Transfer of Undertakings TUPE
The Transfer of Undertakings (Protection of Employment) Regulations protects employees by preserving their current terms and conditions of employment if the business that employs them changes hands. In this situation, the employees are moved to a new employer from their old one.
Employers have the legal right to transfer new employees provided they remain on their existing terms and conditions of employment with all their rights and liabilities unaffected. This includes their rights concerning their job title, salary, sick pay, bonuses and holiday leave.
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A TUPE situation arises when:
- Part or all of a business is bought or sold as a going concern or is merged with another business creating a new employer.
- If activities are outsourced, brought in-house or transferred elsewhere.
- The contract for a service is moved between service providers. This is only applicable to services and not goods and cannot be a single or short-term event.
Relevant transfer of an economic entity
To be classified as a TUPE transfer, there has to be a relevant transfer of an economic entity that retains its identity. To determine if this has taken plase, there are a variety of factors that will be examined, including:
- The type of undertaking.
- Whether tangible or intangible assets are being transferred.
- If customers are being transferred.
- The similarities between the relevant activity before and after the transfer.
- How long the activity was suspended.
- Whether most employees are taken on by the new employer.
Are employee pensions protected?
The transferred employees' pensions are not protected and will not transfer, but a new pension scheme has to be in place by the new employer with all employees auto-enrolled with the right to opt-out.
TUPE and unfair dismissal
Any dismissal is automatically unfair if the reason for it is the transfer. In order to comply with TUPE, the employers should inform their staff of the transfer and the measures proposed, they should also consult with them about this. The original employer has to provide the new employer with all relevant information about the employees at least 28 days before the transfer.
Contact our TUPE Lawyers in the UK
TUPE is a complicated area of law but our expert employment lawyers can advise and represent clients going through this process. To find out more about how we can help you, please contact us, complete the online enquiry form or email us at email@example.com.