What is TUPE?
TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations 2006. TUPE regulations protect employees’ rights when the business they are employed by changes owner.
When does TUPE apply?
TUPE applies to a “relevant transfer” which could mean either of the following:
- Business transfers: The transfer of a business (for example the sale of a business), undertaking or part of an undertaking or business to another person where there is a transfer of an economic entity that retains its identity following the transfer; or
- Service provision changes: This involves a change in the provider of a service where certain conditions are satisfied (for example reallocating work to a new provider).
Who are the transferor and the transferee?
Under a TUPE transfer, the term ‘transferor’ and ‘transferee’ are used to describe the original and new employer.
The ‘transferor’ is the seller of the business and the ‘transferee’ is the buyer.
Obligations under a TUPE transfer
Both the transferor and transferee have a legal obligation to inform and consult with the ‘appropriate representatives’ of the employees who may be affected by the transfer and any measures connected with it.
The appropriate representatives will be recognised trade union representatives or, if there are no such trade union representatives, elected employee representatives. If there are no existing employee representatives, new ones can be elected for the purpose of TUPE.
Employee representatives can be elected informally by the affected employees, however, if an informal agreement cannot be reached, a formal election will need to take place. There are detailed regulations concerning this election process that the employer will need to follow.
If the employees fail to elect representatives within a reasonable time of having been invited to do so, the employer must inform each employee individually of any measures. A failure to inform and consult (if necessary) can result in protective awards of 13 weeks’ gross pay per employee being awarded.
The transferor is also required to notify the transferee of specific employee liability information (ELI). This information must be given to every transferring employee and includes information such as the employees’ identity and age, any disciplinary procedure taken against them, or any grievance procedure taken by an employee during the last two years. If a transferor fails to comply with the obligation to supply the specified ELI, the transferee can bring a claim to the employment tribunal on or after the transfer and can result in an award of a minimum of £500 per employee.
How can we help
For further information or advice in relation to TUPE transfers or any related subjects, please contact a member of our expert Employment Law team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online form.
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