TUPE – know your obligations

What is TUPE?

TUPE is the abbreviated term for a set of complex rules called the Transfer of Undertakings (Protection of Employment) which can have significant financial effects on the existing (outgoing) and new (incoming) employer if the process is handled incorrectly.

TUPE is designed to protect an employee’s employment terms and conditions when there is a change of employer.

When does TUPE apply?

TUPE applies when:-

(a)    an employee transfers to a new company; the classic example being the sale of a business to another company; or

(b)    There is a service provision change. For example, outsourcing, insourcing or where a contractor takes over a contract (from another company) to provide a service for a client.

There are some circumstances where both (a) and (b) apply and the two are not necessarily mutually exclusive. It may also not be clear if either apply.

What are the obligations when TUPE applies?

Before any transfer takes place, the affected employees should be told either directly, through appointed representation, or through a recognised trade union:

(a)    That the transfer is going to take place

(b)   Why the transfer is taking place

(c)     When the transfer is taking place

(d)     How will the transfer affect the employees

(e)     Whether there will be any reorganisation

That way, the affected employees will not be taken by surprise regarding any of the changes and a structured procedure should be followed.

What are the penalties of failing to comply with TUPE?

There are sanctions and penalties for failing to comply with the strict requirements under the TUPE rules. Claims can be brought for automatic unfair dismissal, constructive dismissal and wrongful dismissal. There is also a raft of specific “fines” calculated up to 13 weeks gross pay for minor breaches. There is every change that will apply to all affected employees and can be a significant expense.

How we can help

It is vital that employees, both outgoing and incoming get this right, not only from a cost point of view but from a HR point of view. Frequently, employers do not take advice before the transfer and are therefore not aware of their obligations. This leaves them open to a challenge in the Employment Tribunal which can prove to be very costly. We can guide you through the TUPE process and provide documentation to accompany the process. In addition, if you believe your employer has failed to comply with their obligations under TUPE we can act on your behalf in presenting a claim to the Employment Tribunal.

Contact one of our employment experts on 0161 330 6821 or via email on:

Mark Hirst (mhirst@bromleys.co.uk)

Nicholas Clough (nclough@bromleys.co.uk)

Rachael Frankland (rfrankland@bromleys.co.uk)

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.