Overview of TUPE: Understanding Transfer of Undertakings (Protection of Employment) Regulations

At HKKLAW, our expertise provides in-depth legal advice and support on all aspects of Transfer of Undertakings (Protection of Employment), or TUPE, from identifying when the regulations apply to managing the transfer process effectively.

The Transfer of Undertakings (Protection of Employment) Regulations, commonly known as TUPE, are a set of regulations within UK employment law designed to protect employees in the event of a business transfer or service provision change. This overview explains the key aspects of TUPE, its implications for employees and employers and the obligations it places on businesses during a transfer.

Whether you are an employee seeking clarity on your rights under TUPE or an employer planning a transfer, HKKLAW is here to guide you through the complexities of these regulations, ensuring a fair and transparent transition for all parties involved.

Our commitment is to safeguard the rights of employees while assisting employers in fulfilling their obligations under TUPE, aiming to maintain stability and protect employment terms during business transfers or service provision changes.

What is TUPE?

TUPE refers to the set of regulations that safeguard employees’ terms and conditions of employment when a business or undertaking, or part of one, is transferred to a new employer. This includes situations such as company mergers, acquisitions, and outsourcing of services. The primary aim of TUPE is to ensure that employees are not disadvantaged by the change in ownership or service provider, preserving their continuity of employment and existing employment terms.

TUPE applies to two main types of business transfers:

1. Business Transfers: This occurs when a business or part of a business moves to a new owner or merges with another business to form a new legal entity.
2. Service Provision Changes: This covers scenarios where services are outsourced to a contractor, transferred from one contractor to another, or brought back in-house.

Key Protections Under TUPE:

Under TUPE, employees of the transferred entity automatically become employees of the new employer at the point of transfer, with their terms and conditions of employment and any collective agreements, preserved. This means:

• Continuity of Employment: Employees retain their continuity of service and any rights, liabilities and obligations from their contracts are transferred to the new employer. Employees therefore automatically transfer to the new employer with their existing terms and conditions of employment intact.
• Protection Against Dismissal: Dismissals connected to the transfer are automatically unfair, unless there is an economic, technical, or organisational (ETO) reason justifying the dismissal. Employees cannot be dismissed solely because of the transfer.
• Informing and Consulting: Employers are required to inform and, where appropriate, consult with employees or their representatives about the transfer, its implication and any measures that may affect them.

Obligations for Employers:

Both the outgoing (transferor) and incoming (transferee) employers have specific obligations under TUPE, including:

• Pre-transfer: The outgoing employer must provide the incoming employer with detailed information about the transferring employees, including their terms and conditions of employment. The incoming employer must advise on any adverse impact so that the affected employees can be informed and consulted on any implication and any measures that may affect them.
• Post-transfer: The incoming employer must honour the terms and conditions of the transferring employees. Any changes to terms and conditions, even if beneficial, can be unlawful unless there is an ETO reason not connected with the transfer.

• Liability: The new employer inherits all employment liabilities, including any ongoing or future claims related to employment contracts.

Managing TUPE Transfers:

Effective management of TUPE transfers is crucial for both transferor and transferee employers:

• Due Diligence: The transferee should conduct thorough due diligence to understand the rights and obligations of the transferring employees, including any potential liabilities.
• Planning and Communication: Early planning and clear communication with employees are essential for a smooth transition. This includes addressing any changes or restructurings that may arise as a result of the transfer.

Challenges and Considerations:

Navigating TUPE regulations can be complex, particularly in determining when TUPE applies and managing the transfer process. Employers must carefully consider the implications of TUPE in planning and executing business transfers or service provision changes, including the potential need for redundancy or restructuring.

Conclusion:

TUPE plays a vital role in protecting employees’ rights during business transfers, while also setting out clear obligations for employers to ensure fair and transparent processes. Both employees and employers must understand their rights and responsibilities under TUPE to navigate business changes effectively.

Given the complexity of TUPE regulations, seeking legal advice is advisable to ensure compliance and to address any specific challenges that may arise during the transfer process.