What is TUPE?

For employers in the UK, navigating employment law can sometimes feel like a maze. One of the more complex areas is the Transfer of Undertakings (Protection of Employment) Regulations 2006, commonly known as TUPE. Understanding TUPE is crucial if your business is involved in acquisitions, mergers, or outsourcing arrangements.

In this blog, we tell you everything you need to know about TUPE to help you to get to grips with the basics of it, enabling your business to stay compliant and safeguard your workforce.

What is TUPE?

TUPE protects employees’ rights when their employment is transferred from one organisation to another. It ensures that employees do not unfairly lose their jobs or see their terms and conditions altered when their employer changes due to a transfer. The regulations apply to businesses of all sizes and are particularly relevant during business acquisitions or mergers, the outsourcing of services (e.g. cleaning or IT support), bringing outsourced services back in-house, and changing service providers.

In short, TUPE ensures a seamless transition for employees, maintaining their existing employment rights.

What are the key provisions of TUPE?

Some key provisions of TUPE include:

1. Automatic transfer of employees – under TUPE, employees automatically transfer to the new employer with their existing terms and conditions intact. This includes their salary, working hours, holiday entitlements, continuous employment start date, and any other contractual benefits.
2. Protection against dismissal – employees cannot be dismissed solely because of the transfer. Any dismissal linked to the transfer is likely to be deemed automatically unfair, unless there is an “economic, technical, or organisational reason” (an ETO reason) justifying the dismissal.
3. Consultation requirements – both the outgoing (transferor) and incoming (transferee) employers are legally required to inform and consult with affected employees or their representatives. Failure to engage in meaningful consultation can result in tribunal claims.
4. Employee Liability Information (ELI) – the transferor must provide the transferee with key information about transferring employees, such as their employment terms, disciplinary records, and any ongoing grievances. This must be done at least 28 days before the transfer.

What are employer’s responsibilities under TUPE?

If your business is involved in a TUPE transfer, it’s essential to understand your responsibilities which will include:

• As the outgoing employer (the transferor):
  • You must inform employees about the transfer and how it affects them.
  • You must provide accurate and timely employee liability information to the incoming employer.
• As the incoming employer (the transferee):
  • You must honour the existing terms and conditions of transferring employees.
  • You must engage in meaningful consultation with employees or their representatives.

What are some challenges employers may face?

Although TUPE is designed to protect employees, it can pose a few challenges for employers. For example, after a TUPE transfer, employers may wish to align the terms and conditions of transferring employees with their existing workforce. However, making such changes can lead to legal risks and must be handled carefully. It’s important to take advice before entering into a harmonisation exercise.

Another challenge employers may face is the management of redundancies. While redundancies may be necessary due to business needs, they must be justified by an ETO reason unrelated to the transfer. Employers should seek legal advice to avoid unfair dismissal claims before making any redundancies.

As well as this, employees may feel anxious about the transfer and what it means for their future. Clear communication and meaningful consultation are vital to maintaining morale and avoiding disputes. By holding group or individual consultation meetings, employers can share relevant information and give employees the opportunity to raise any questions or concerns they have about the transfer or their own particular circumstances.

Some practical tips for employers

If you’re about embark on a TUPE transfer, here are some practical tips to follow as an employer:

1. Plan early – it’s wise to start planning as early as possible if you anticipate a TUPE transfer. You should identify the affected employees and understand their terms and conditions.
2. Seek legal advice – as mentioned at the start of this blog, TUPE is a complex area of law, and non-compliance can lead to costly claims. Engaging an employment lawyer or HR consultant can help you navigate the process confidently.
3. Ensure transparent communication – always keep employees informed at every stage of the transfer. Transparency builds trust and reduces the likelihood of disputes.

If you want to find out more about TUPE, ACAS has a range of excellent resources and templates that can guide you through the process.

HRX can help with your TUPE transfer

TUPE may seem daunting at first, but understanding its core principles can help you manage business transfers effectively. By protecting employees’ rights and fulfilling your legal obligations, you can ensure a smooth transition for all parties involved.

Correct and up to date information is essential when dealing with a TUPE process and using a HR system, like HRX, will make this much easier. HRX has individual records for each employee, so if you are in a situation where you have to TUPE staff out of your business, you’ll have all the information and data needed at hand to complete the ELI record. Likewise, if you are bringing a group of new staff into your business, that process can be made much simpler when using HRX.

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