What Is Transfer Of Undertakings?
The definition of TUPE refers to the Transfer of Undertakings (Protection of Employment) Regulations. Regulations outlined by these laws are set to protect the employment contracts and conditions of the existing employees when a business is sold on or transferred, or there is a change in the provision of contracts or employment.
In simpler terms, if a business or part of a business (for example, a single branch of a business or franchise) is sold to new owners or transferred to them, then TUPE is designed to protect the rights of all existing employees and of the terms and conditions of the jobs they hold. TUPE regulations protect the employee’s contracts that should not be changed because of the transfer of ownership or operation of the business.
Or: All employees’ employment will be maintained and continued retaining all existing contractual terms and conditions.
TUPE introduced 3 strict guidelines to employment law:
- That the employees of a business transfer to the transferee who inherits obligations to their contracts.
- In most circumstances after that the employees of a business are protected against dismissal because of the transfer.
- That the employees of a business or their representatives must be informed and consulted with regarding their positions during the transfer.
Key areas of transfer include:
- The terms and conditions of employment contracts.
- Statutory protection – for example, against unfair dismissal.
- The liabilities for breach of duty – for example, existing claims against the previous employer/business owner.
Regulating A Relevant Transfer
In accordance with the TUPE regulations it is necessary to first ascertain that the transfer is a qualifying business transfer.The areas they must consider during their assessments are; the transfer of assets, the staff involved, that the business activities and operations before and after the transfer are the same or similar, the transfer of the business’s customers, and the type of business undertaking involved.
Regulations set out by TUPE can also apply to contracting out services and the changes of services between associated contractors during a business transfer, setting up a franchise, business mergers, acquisitions and the granting of leases.
Protecting The Employees’ Rights
The job of the TUPE solicitor is to assess whether the employees’ rights during the transition or the transfer of undertakings have been protected.
They will consider whether employees’ rights have been protected when a transfer takes place.
The TUPE solicitor will evaluate whether employees have any claims in circumstances where they were previously dismissed by the outgoing employer if the reasons for dismissal are connected to the transfer.
A dismissal may be automatically unfair if the reason for the dismissal was due to the transfer. There are certain exceptions where an economic, technical or organisational reason is present for the dismissal.
They will be responsible for providing a flow of information regarding the transfer of the business and consultations with the employees through their representatives.
They will be accountable for the transfer of employee information and their liabilities from the transferee from the transferor (from the previous owner to the new one).
They will also supply any variation to the employment contracts when a transfer is carried out in certain types of insolvency. In cases of solvent transfers there are very few reasons for changes to contract.
Obligation To Inform And Consult
In such cases of business transfer the TUPE laws require the transferring employer to inform all employees of the date of transfer, the reason for the transfer and the legal, economic and social implications that will affect the business employees.
Any changes or new measures implemented as a result of the business transfer must be discussed with an employee representative. The new employer carries a legal duty to the employees to keep them informed of updates through the continuing process.
TUPE will provide protection to employees against any dismissal that doesn’t conform to the general rules of employment. The laws for unfair dismissal in relation to the transfer of the business will apply to all employees holding the qualifying period of service, which is generally accepted to be of 2 years.
Raising A Claim
Any employee who is being dismissed solely due to the transfer of the business is entitled to raise an employment tribunal claim in regards to unfair dismissal. The claim must be raised within 3 months of the date of dismissal.
Failure to notify or inform employees or their representatives of the transfer in advance and also regarding all proposals that affect the employees can carry a compensation award of up to 13 weeks pay for each employee.
Contact Employment Solicitors Manchester Now
Our dedicated TUPE solicitors will guide you through the best action to take during any complications arising from a business transfer procedure.
You can call on 0161 82 11 559 or contact us by clicking here for an initial consultation regarding all of your employment concerns. We offer complete and full advice in easy to understand terms to help establish the most likely outcomes for your case in a relaxed and pressure free environment.
We understand how sensitive making a claim against your previous employer can be so our expertly trained staff deliver each of our services with empathy and understanding. It is entirely up to you whether you decide to pursue your claim or not. We’re here to help you make those important decisions backed by our years of experience and industry knowledge.