Where a business is going through a transfer of ownership or merger with another organisation, the TUPE regulations must be complied with.
TUPE Regulations have been designed to protect employees’ rights in business transfer and service provision transfer situations. TUPE stands for “Transfer of Undertakings (Protection of Employment) Regulations 2006″ as amended by the “Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014.”
The TUPE legislation has several aims:
1. To ensure that employees affected by the TUPE transfer have their employment terms and conditions protected.
2. To ensure that an affected employee’s contract of employment moves with them and that they are not engaged by the incoming party on less favourable terms.
3. To ensure that an affected employee is consulted and informed about the transfer.
If the TUPE regulations are not complied with, there may be an employment dispute and grounds for an Employment Tribunal claim. Generally, employees terms and conditions of employment cannot be changed after TUPE has occurred. However, there are potential exceptions, for example where there is an economic, technical or organisational (ETO) reason. An employee cannot be made redundant because of a TUPE transfer, however, sometimes the are circumstances around the transfer in which redundancy may be appropriate such as an ETO reason.
The two main transfer situations where the TUPE regulations apply are:
1. Business transfer: TUPE regulations apply if a business or part of a business moves to another business. This could be a merger with another business to make a brand new employer.
2. Service provision transfer: TUPE regulations apply where a client engages a contractor to do work on its behalf, reassigning such a contract or bringing the work in-house.
While the business must be based in the UK for the TUPE legislation to apply, it is not required that the whole business in UK based. Provided that the part of the business that is going through a transfer of ownership or merger is in the UK, TUPE shall apply to the affected employees.
While it may appear that the employer has changed when an organisation changes their name, as there is no change in the entity in regard to the ownership or working practices, TUPE does not apply. However, employees should still be informed of the change in good time.
If you are involved in a TUPE process, we recommend you seek our assistance in the early stages of the process. We will be able to provide our guidance, assistance, and representation to help you save time and costs.
TUPE is one of the most complex areas of employment law and with the need for disclosure having to take into consideration GDPR, there are plenty of steps throughout the process that may give rise to employment tribunal claims if the correct process is not followed. For example, if the correct procedure for consulting with affected employees prior to the transfer is not followed, under the TUPE legislation, each employee may be awarded up to 13 weeks’ pay. This can result in a large sum of money being owed to affected employees, where a large number of employees are involved. The liability, and therefore the payment of any award, transfer to the incoming employer once the transfer has taken place.
We would be able to tell you whether the TUPE regulations apply. If they do, we will ensure that you fully understand what your rights and obligations are in the situation. Furthermore, we will assist you to ensure that you fulfil your legal obligations towards your employees.
An outgoing employer is responsible for the following:
An incoming employer has more responsibilities, including:
At Davenport Solicitors, our expert lawyers have considerable experience in handling TUPE cases, providing up-to-date employment law advice to businesses. We understand that TUPE is a very complex area of employment law and that the process can put great strain on the employer involved in the process. At Davenport Solicitors, we recognise that every transfer, merger and acquisition is unique, therefore, we offer comprehensive and tailored legal advice to employers on their obligations when dealing with transferred employees.
Davenport Solicitors is a specialist employment and immigration law firm based in the City of London. We help businesses of all sizes, from large corporates to SMEs and start-ups, as well as HR professionals, on all aspects of employment law and business immigration.
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