Free Guide to TUPE for Small & medium sized Employers

TUPE stands for the Transfer of Undertakings, Protection of Employment Regulations 1981, (amended 2006, 2014) and is designed to help protect employees employment rights.

Dealing with a TUPE transfer can be one of the most complex and time consuming HR issues for a business to deal with.

In broad terms TUPE applies in 2 types of transfer:

• Business Transfer (i.e. the takeover / merger or transfer of a business to or from another company / owner) 

• Service Provision Transfer (the transfer of a contract for the provision of services to or from another supplier e.g. contracted cleaning services)

In both these cases the employees associated with the business or service provision have the right to stay within the role and their current employment rights are protected under TUPE legislation.

This also applies if only a percentage of employees time is associated with the actual contract.

Example: ABC cleaning service wins a contract for cleaning a local school from Clean Right LTD. Employee A is contracted for 40 hours per week, but only works at the school for 20 hours per week.

Under TUPE, employee A has a legal right to retain her 20 hours per week at the school. 

This type of split working can become especially difficult when a employee does multiple hours at multiple locations and employment cannot be reasonably split. 

In essence the new employer steps into the shoes of the old employer taking over all the employees’ original terms, conditions and liabilities. Meaning a transferring employee maintains a continuation of service and cannot be given any terms and conditions that are less favourable than those they are currently employed on.

As a new employer, you also take over any liabilities between the original employer and the employee.

Example: If ABC cleaning had not paid the last 4 weeks wages to employee A, as a new employer you would be liable for the payment of these missing wages.

It is very difficult to change or harmonise terms and conditions of an employee protected under a TUPE transfer.

Employers are only allowed to make changes to an employee’s terms and condition protected by TUPE on the grounds of ETO (economic, technical or organizational) reasons. However, this is not as easy as it may seem, as a business would need to demonstrate these change involved the whole workforce i.e. restructuring.

Employees terms and conditions are protected under TUPE indefinitely.

1. New owner / service provider agrees to take over service or business with employees
2. Old and new owner /service provider consult over transferring employees
3. Previous owner / service provider gives details of employees associated with transfer
4. New owner / service provider undertakes due diligence on the information provided
5. If required employee representatives are elected
6. Consultation undertaken with employees, trade unions or elected representatives
7. Employees transfer to new owner / service provider on the same or better terms and conditions

When considering taking over a business or service provision when TUPE may apply, it is worth getting professional advice & support with the process as this may save you much more time and money in the longer term.