TUPE or the Transfer of Undertakings (Protection of Employment) Regulations is an important area of employment law that relates to how your employees should be treated when your undertaking or business goes through a change of ownership or when you take over another business.

TUPE seeks to protect the rights of your existing employees and prevent them from being treated unfairly in these circumstances, and it is therefore important that you are aware of your obligations so as to avoid any potential claims against you in the Employment Tribunal.

The TUPE regulations stipulate that the contracts of employment between the old employer and the employees are transferred without any changes to the new employer. This is the opposite of the common law position, in which if either signatory to the contract changes the contract itself is terminated automatically.

The TUPE regulations are intended to provide a safeguard for your employees, as any subsequent dismissal or significant change to their terms and conditions of employment that comes about as a result of the transfer of ownership could potentially be classed as unfair dismissal. In such circumstances, your employee could have case against you as their new employer.

If you are in the process of either being taken over by another business, or you are buying a business that has employees, it is advisable to ensure that you are well acquainted with your obligations. It is of note, that TUPE can also apply in certain situations when a contract to provide services is taken over by a new provider ie: insourcing and/or outsourcing.

Most employers will confirm early on in the consultation process, whether there is any dispute between the transferor and transferee about whether the TUPE regulations apply. Both the transferor and transferee have a duty to provide information and engage in a meaningful consultation with affected employees about the potential transfer .  As well as the duty to consult with employees individually the transferor also has a duty to consult with staff collectively (as a group) if you have more than 10 employees.

The information that should be provided to affected employees in writing includes:-

  • details about when and why the transfer is going to happen;
  • any social, legal or economic implication regarding the transfer, ie: a change of work place;
  • any measures envisaged ie: if the transferor is intending to make redundancies;
  • and details of any agency workers being used.

It is not uncommon when a transferee, as a result of a TUPE transfer, takes on transferred employees in addition to its existing employees that ta surplus of employees is created that could result in redundancies.  Although redundancy is still a potential fair reason for dismissal,  the transferee should still follow a fair and reasonable consultation process with all affected employees.  All employees includes both the transferred and existing employees. If the transferee only puts the employees that have been transferred at risk  of redundancy then those employees may have potential claims against their new employer.

If the transferor and transferee fail to inform and consult with the affected employees then the employees could bring a claim in the employment tribunal for up to 13 weeks' pay per employee, depending on the extent of the failure.

The TUPE regulations protect employees from any subsequent dismissal or significant change to their terms and conditions that come about as a result of the transfer of ownership. If this happens, it may be classed as unfair dismissal depending on the circumstances.

Ashby Cohen can provide you with the relevant information and advice in order to mitigate the risk of claims for automatic unfair dismissal. We specialise in employment law cases, and our years of experience as employment lawyers make us especially qualified to assist you with any workplace bullying issues you may have. Please contact us for an initial free telephone consultation.

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