TUPE Transfer

Employer

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (or "TUPE") came into force in April 2006. These Regulations affect the transfer of employees to a new employer due to a transfer of the business from one owner to another.

Under the Regulations, employees who were employed by the former employer at the time of the transfer automatically become the employees of the new employer as if their Contracts of Employment were originally made with the new employer. The new employer will take over all the employment liabilities of the old employer (with the exception of criminal liabilities and occupational pension rights relating to retirement).

As an employer, it is important to note that, under the Regulations, any dismissal as a result of the transfer is automatically unfair.

You must consult employee representatives (even if you are just contemplating a transfer and prior to any contracts being prepared). You should consider any representations made by the employee representatives in good faith and give reasons for the rejection of any of those representations.

There are strict time limits for providing information ‐ for example, the transferor must provide the transferee with employee liability information no later than 14 days before the transfer.

Changes to a transferring employee's Contract (even if made with the consent of the employee) will be void if the sole or principal reason for the change is to facilitate the transfer itself, or virtually any reasons that is not an economic, technical, or organisational reason entailing changes in the workplace.

Any dismissal by you of a transferring employee will be automatically unfair if it is for a reason in any way connected with the relevant transfer. Such a dismissal may be justified for an economic, technical, or organisational reason entailing changes in the workforce, but not otherwise.

As an employer, you should not dismiss employees immediately before the transfer or after the transfer, since such dismissals are normally considered to be automatically unfair. If the new employer offers new terms that represent a fundamental breach of Contract the employee can refuse to transfer and the outgoing employer will be liable for any breach of contract or unfair dismissal claim.

The new employer will have to accept legal responsibility for the previous employer's actions, and detrimental changes connected with the transfer will be void (though beneficial ones will be binding).

As you can see, TUPE transfers, which can initially sound quite straightforward, can, in practical terms, contain several pitfalls that could result in costly litigation if you do not know how to avoid them. Contact Fosters for further details if you are contemplating transferring your business or if you are acquiring another business.

The above is for general information only and should not be construed as formal legal advice.


Employee

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (or TUPE) came into force in April 2006. These Regulations affect the transfer of employees to a new employer due to a transfer of the business from one owner to another.

Under the Regulations, if you were employed by the former employer at the time of the transfer, you will automatically become an employee of the new employer and legally you will be treated as if your Contract of Employment was originally made with the new employer. Your new employer will take over all the employment liabilities from your old employer (with the exception of occupational pension rights relating to retirement).

As an employee, it is important to note that, under the Regulations, the time for bringing a claim to enforce liability for acts done by the transferor is six months from the date of the transfer.

Your employer should consult with employee representatives at every stage in the transfer process (including the initial contemplation of transfer stage). Your employer should consider any representations made by the representatives in good faith and give reasons for the rejection of any of those representations.

It is also important to note that changes to your Employment Contract (even if made with your consent) will be void or the sole or principal reason for the variation is the transfer itself, or a reason connected with it that is not an economic, technical, or organisational reason entailing changes in the workplace.

As a transferring employee, if you are dismissed, you will automatically have a claim for unfair dismissal unless the reasons for the dismissal can be justified by your employer as being an economic, technical, or organisational reason entailing changes in the workforce.

In addition, where the transfer involves, or would involve, a substantial change in your working conditions to your substantial detriment, you can treat the Contract as being terminated, without the need to show actual breach of contract. This is quite a useful tool in any claim to an Employment Tribunal, but the level of proof required can make such a claim difficult.

As you can see, TUPE transfers, which can initially sound quite straightforward, can, in practical terms, contain several pitfalls that could impede your success in negotiating satisfactory conditions to any transfer of your employment or success in an Employment Tribunal. Contact Fosters if your employer is considering transferring its business or has already transferred its business without following the correct procedures.

The above is for general information only and should not be construed as formal legal advice.

Contacting Us

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