Employment Law for Business

When a business or service provision is transferred, all transferred employees must retain the terms and conditions of their previous employment contract. If this is not honoured by the new employer, the employee may claim unfair dismissal. If a company has failed to uphold the terms and does not have an economic, technical or organisational reason for the change, the claim will be automatically upheld.

When does TUPE apply?

TUPE relates to the Transfer of Undertakings (Protection of Employment) Regulations 2006 and applies when there is a business transfer or service provision transfer that impacts employees.

Business transfers – a business or part of a business transfers to a new owner or merges with another business to form a new employer.

Service provision transfers – service provision is transferred (for example, a cleaning or security contract).

  • Outsourcing – a service provision changes hands from a client to a contractor
  • Re-tendering – a service provision transfers from one contractor to another
  • In-sourcing – a client brings a contracted service provision in-house

TUPE for outgoing employers

The key responsibilities for the outgoing employer are:

Disclosure of employee liability information – there are certain details about each employee which must be disclosed to the incoming employer. These include identity and age of employees, as well as details about any disciplinary actions, grievances or legal actions that have taken place in the last two years, and any collective agreements.

Consultation – employers must consult with employees regarding the transfer via an appropriate representative. They must provide written information about the transfer, including any social, economic or legal implications, and any measures that are going to be taken by the incoming or outgoing employer.

TUPE for incoming employer

Employment terms and conditions for all transferring employees must be honoured, even if they do not align with your standard terms and conditions.

However, if your company offers more favourable terms, then incoming employees may wish to transfer on to your contracts instead.

Employees who believe that their terms and conditions have been substantially changed to their detriment have the right to terminate their employment and claim constructive unfair dismissal at a tribunal.

Redundancy and dismissals

You cannot simply dismiss employees as a result of the transfer. If an employee is dismissed either before or after a transfer and the sole or principal reason for the dismissal is the transfer, it will be automatically classed as unfair dismissal. TUPE regulations apply to all existing employees, regardless of their situation (pregnancy, maternity leave, sickness, grievances, disciplinary action).

It is possible to make redundancies when a transfer is taking place, but you must prove an economic, technical or organisational argument for this and follow correct redundancy procedure.

How we help

We are experts in employment law and understand all the complexities of TUPE regulations. Whether you are the incoming or outgoing employer and regardless of how many employees are involved in the transfer, we can help protect your business.

To ensure that you do not breach TUPE regulation and bring unfair dismissal cases against your organisation, contact our team today for a free 30-minute telephone consultation.

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