What is TUPE in the UK?

The Transfer of Undertakings (Protection of Employment) Regulations, or TUPE, is a significant part of UK employment law. It protects employees’ rights during a business transfer or service provision change, such as outsourcing or mergers. TUPE ensures that employees cannot be unfairly dismissed or disadvantaged when their employer changes hands.

Key Features of TUPE Employee Protection

TUPE ensures that an affected employee retains their existing employment rights during a relevant transfer:

Contractual Continuity: Employees’ contracts, including pay, holiday entitlement, and contractual benefits, transfer to the new employer.

Continuous Employment: The employee’s length of service with the previous employer is preserved.

Pension Rights: Workplace pensions are usually exempt, but the new employer must offer an alternative scheme if required.

TUPE Applies To

TUPE applies to:

Business Transfers: When a business or part of it is sold or merged, including the transfer of assets and employees.

Service Provision Changes: When a contract for services, such as workplace catering or cleaning, is handed over to a new provider.

TUPE does not apply to:

One-off Projects: Short-term contracts.

Cases involving only the supply of goods, not services.

Employer and Employee Rights Employee Rights

Preservation of Terms: Employees’ existing contract terms must be maintained unless changes are agreed for an economic, technical, or organizational (ETO) reason.

Consultation: Employees or their appropriate representatives (e.g. a trade union representative or elected employee representatives) must be properly informed of the transfer and its implications.

Employer Duties

The outgoing and incoming employers are jointly responsible for:

Consulting and Informing: Employers must notify employees or their representatives about the transfer and any expected changes.

Employee Liability Information: The outgoing employer must provide details of transferring employees’ contracts, including any employment liabilities, unpaid wages, or personal injury claims.

TUPE and Redundancy

Employees cannot be dismissed solely because of a TUPE transfer. However, redundancy pay may apply if the dismissal is for a valid organizational reason post-transfer. Without such reasons, dismissals could be considered automatically unfair, and employees may claim unfair dismissal at an employment tribunal.

FAQs

When does TUPE apply?
TUPE applies to business transfers or service provision changes where employees transfer to a new employer and the business continues to operate as normal.

Can employees refuse to transfer under TUPE?
Yes, but their employment will end without redundancy pay, as it is treated as a resignation.

How long does TUPE protection last?
TUPE protections apply immediately and are strongest during the initial period after the transfer. Employees’ terms can only be changed for valid ETO reasons.

Can contracts be changed after a TUPE transfer?
Only with the employee’s consent and for valid reasons, such as an economic, technical, or organizational (ETO) reason. Without this, changes could breach TUPE regulations.

Do TUPE regulations apply to the public sector?
Yes, TUPE regulations can apply to public sector transfers, especially when services are outsourced to private companies.

TUPE Legalities

TUPE is a complex process with significant legal implications. Employers must consult and inform employees properly to comply with employment protection laws. Failure to follow the correct processes could lead to unfair dismissal claims, employment law breaches, or disputes over collective agreements.

Conclusion

TUPE protects employees’ rights and ensures that employment contracts and contractual benefits transfer automatically during business transfers or service provision changes. Both the outgoing and incoming employers must uphold employees’ rights and follow strict consultation processes.

For employers, seeking specialist legal advice is essential to navigate TUPE regulations effectively and avoid costly mistakes. For employees, understanding your TUPE rights ensures you are treated fairly during these changes.

If you need guidance on TUPE compliance, redundancy procedures, or employee consultation, contact our team for expert advice.