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TUPE Guidance for Employers

Guidance for employers

If your business is involved in a sale, outsourcing or bringing services back in-house, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) can have significant implications for your organisation. These regulations are designed to protect employees’ rights during transfers, but they also create legal obligations for employers. Understanding when TUPE applies and how to manage the process correctly is essential to avoid costly liabilities and ensure compliance.

To whom does TUPE apply?

TUPE will protect all employees who are “assigned” to the transferring undertaking/service.

TUPE explained

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) apply to protect the rights of employees when their employer changes. 

When does TUPE apply?

The Regulations typically apply to:

  • The sale of a business (an asset sale, rather than a share sale)
  • Contracting-exercises

o   Contracting-out a service

o   Re-contracting a service

o   Bringing a service back in-house

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Rena Magdani

Partner & National Head of Employment, Pensions & Immigration

How our employment solicitors can help

How our employment solicitors can help

Our employment solicitors are experienced in dealing with TUPE issues and can help with:

  • Advising on complex issues where it is not obvious whether TUPE will apply to an outsourcing. For example, if at the time of the outsourcing the nature of the service is changing
  • Advising on questions as to which employees will be affected by a TUPE transfer. For example, in the case of service transfers where employees spend some, but not all, of their time working in the service that is being transferred. This issue can often apply to employees working in central functions such as accounts or where employees currently work in certain geographical locations and the new service will have different boundaries
  •  Helping employers to avoid liability (which can be up to 13 weeks’ pay per affected employee) for failures to inform and consult with employees or representatives
  •  Drafting warranties and indemnities for incoming employers to offer protection against employee claims that pre-date the incoming employer’s involvement
  • Drafting exit provisions in outsourcing contracts to protect an organisation’s position when there is a future TUPE transfer
  • Advising on collective elements of transfers, such as transfer of union recognition and collective agreements
  • Advising employers as to whether there is an ETO reason that might justify dismissals (for example, where the new employer does not need all transferring employee because of economies of scale) and the fair process to be followed in relation to any dismissals
  • Advising on an employer’s post-transfer duties in relation to pensions auto-enrolment and immigration right-to-work checks
  • Providing advice to companies purchasing the assets of insolvent businesses on the different way in which TUPE applies in those cases
  • Advising those with outgoing employees on what information they need to provide to the new employer, and when they need to do so
How does TUPE protect employees?

How does TUPE protect employees?

In summary, TUPE provides the following protections:

  • Employees transfer to the new employer with full continuity of service and on their existing terms and conditions (save for certain exceptions in relation to some pension schemes)
  • Any dismissal because of the transfer will be an automatically unfair dismissal unless for an economic, technical or organisational (ETO) reason entailing changes in the number or functions of the workforce
  • Any variation to an employment contract because of the transfer is an invalid variation unless for an economic, technical or organisational (ETO) reason entailing changes in the number or functions of the workforce
  • Anything done in respect of the employees by the outgoing employer before the transfer will be deemed to have been done by the new employer.  The new employer will therefore inherit liability for claims for pre-transfer discrimination of non-payment of National Minimum Wage, for example
  • Employees (or appropriate representatives) have the right to be provided with certain information in advance of the TUPE transfer, including whether the new employer envisages taking any measures in relation to their employment
  • Existing collective agreements with trade unions can transfer to the incoming employer

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Rena Magdani

Partner & National Head of Employment, Pensions & Immigration

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