TUPE transfers are a complex legal area and since no two situations will be the same, it is important for employers to seek advice on each individual set of circumstances. To protect your business, you will need to understand what TUPE means for you and when is likely to apply, and the steps you have to take to ensure that you comply with your obligations.
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) were introduced to preserve continuity of employment and to protect the employment contracts of existing employees when the identity of their employer changes, for example, when a business (or part of a business) is sold or a service provision is subcontracted out (‘outsourced’) or brought back in-house (‘insourced’). There is no option to contract out of TUPE, and the penalties for non-compliance can be great.
The bottom line is that all employees transfer to the new employer, with their existing contracts and conditions intact (with some exceptions, such as in relation to pension schemes) and the new employer steps into the shoes of the old employer.
Both the old and new employers have a duty to consult with any staff who may be affected by the transfer, and to exchange certain information about, and to, those affected employees. The balance of liabilities between the old and new employers must be carefully negotiated.
Caution should be exercised by employers with any attempt to ‘harmonise’ the two workforces, or when carrying out dismissals either before or after a TUPE transfer, as these could result in unfair dismissal claims. Certain rules may be relaxed in order to incentivise and protect new employers where the old employer is insolvent.
Talk to Tollers
The key to a successful TUPE transfer lays in good advance planning, identifying the key risks at an early stage, allowing sufficient time for the consultation process and the information exchange and maintaining an open dialogue with staff throughout the process. At Tollers, we can provide you with tailored advice and practical support to guide you through the TUPE maze.