Often, the first time an employee will encounter the TUPE Regulations is in the context of a redundancy situation. It’s certainly a complex area- but what do the regulations mean in practice? Yunus Lunat, Partner and Head of Employment Law at Ison Harrison, makes sense of the rules here.
TUPE stands for Transfer of Undertakings (Protection of Employment) Regulations 2006.
When a business is sold, its employees will find themselves automatically moving across to the new company.
When does TUPE apply?
There are two scenarios in which TUPE applies:
- Business transfers: Where a business moves from one employer to another, in whole or in part, including mergers where two businesses close and form a new business entity together. In order for TUPE to apply the identity of the employer must change.
- Service provision changes: This may be if an in-house service (often seen with office cleaning and catering) is now to be undertaken by a contractor. Similarly, it can arise if an existing contract ends and it is either awarded to a brand new contractor, or if the client takes the work in-house again.
The stipulation is that the work being carried out after the service provision change is ‘fundamentally or essentially the same’ as before. This differs from a business transfer, where the work being carried out is likely to stay exactly the same.
Who does TUPE apply to?
TUPE applies to all employees of businesses in the UK- the size of the business is irrelevant. The part of the business that is transferring ownership must be based in the UK, i.e. it could have a parent company located elsewhere.
What happens under TUPE?
There is an obligation upon employers to inform and consult staff. This entails not only providing basic details, such as why/when the transfer is happening, but to explain exactly how they will be impacted.
This consultation must be carried out via a trade union, if there is one, or employees appointed to act as representatives.
Failing to carry out this process can prove costly for employers- if they fail to do so, damages can be awarded.
What are the safeguards for employees?
Perhaps the most important provision for employees is that they will transfer on the same terms and conditions as before. The clock doesn’t reset on length of service, either- this is preserved fully.
In the event that the employer makes changes to an employee’s contract terms, this may give rise to a claim for constructive dismissal. Dismissals may also be automatically unfair if the sole behind them is the transfer. In both cases, employees will need the requisite two years’ service.
Redundancy situations linked to a transfer must, as in any other case, be genuine and the relevant consultation process must be followed.
If your employment is being affected by a transfer and you feel the proper procedure is not being followed, please contact Yunus today on 0113 284 5023 or at yunus.lunat@isonharrison.co.uk.
