The Transfer of Undertakings Protection of Employment Regulations, usually known as TUPE, applies when an employer is selling its business to another organisation.
TUPE can also apply when an organisation supplying a particular service to a business is no longer required to do so and the work is moved to another contractor or in-house.
As the name suggests, the regulations are in place to protect the employment of those employed by the selling company or the company which is no longer to provide services. Whilst there are some exceptions, broadly employees’ terms and conditions of employment move from the existing employer to the new employer without any alteration. The period of continuous employment is not in any way affected. The rules surrounding TUPE are complex. Outgoing employers are required to notify employees of the proposals at an early stage and, in most cases, to consult about those proposals.
Usually, there is a requirement to provide notification to representatives of the employees concerned. This in itself can cause challenges as most employers do not have employee representatives on hand in order to enter into discussions for these purposes. There are severe restrictions upon what the incoming employer can change; although changes, such as redundancy, can sometimes be justified as what is known as an “economic, technical or organisational reason” (“ETO”). There is also a requirement upon the incoming employer to notify, and sometimes consult with, its existing staff.
If an employer gets it wrong the sanctions can be quite dramatic with awards often of 13 weeks’ pay per employee for failing to undertake the process properly and also potential claims for unfair dismissal. Unless an employer is familiar with the TUPE process it is a good idea to seek legal advice upon its application.
From an employee’s perspective, he or she may wish to obtain advice to ensure that the issue is being dealt with appropriately during the process.