Often when important changes happen within a business, whether it’s being entirely transferred over to another owner, or part of it is being bought out, the question many employees ask is “what does this mean for me?”
If you believe your employer has breached TUPE regulations, get in touch with us today on 0808 164 0808 as our team of experts may be able to help. If you require more information please continue reading.
What is TUPE?
TUPE stands for Transfer of Undertakings (Protection of Employment), and is essentially a way for employees to be protected should their employment be transferred to another employer. TUPE law also enables any liabilities associated with employees to be moved over to the new employer when the business changes hands.
TUPE is relevant to many different businesses, and many different transactions they may be making, no matter their size. TUPE regulations protect the following two types of transfers:
- Standard transfer – where a business moves over to another owner, or merges with another business to create a new, single entity. This also relates to parts of businesses coming under new ownership.
- Service provision transfer – SPCs, according to Regulation 3(1)(b)(i)-(iii) concern outsourcing, second generation outsourcing and/or re-tendering, and in-sourcing.
Some new business owners may decide to cut their workforce in half to save on costs, or even before a transfer happens there may be redundancies that appear seemingly out of nowhere. It can be a frustrating and stressful time for many employees.
Regulation 3(1)(a) explains this as: “a transfer of an undertaking, business or part of an undertaking or business situated immediately before the transfer in the UK to another person where there is a transfer of an economic entity which retains its identity.”
But what does this mean for employees? When the transfer happens, all employees of the business being transferred are automatically moved over, including the terms and conditions of their employment contracts. Although it is the legal right of employees to transfer with their previous contractual terms in tow, there may be special circumstances that don’t apply with regard to pensions.
If an employee takes their employer to an employment tribunal for breach of TUPE regulations, the following factors will be considered when determining if the transfer is one to which the TUPE Regulations apply:
- The type of undertakings that are being transferred and whether these include assets such as buildings or mobile property
- Whether any clients/customers of the business have been transferred
- Whether the employees of the business have been transferred
- Any intangible assets that are being transferred, such as patents and trademarks
- The correlation between the activities carried out prior to and after the transfer
Service provision changes
SPCs, or service provision changes, relate to the following three elements:
- Second generation outsourcing/re-tendering
This is where a role that is usually carried out internally to the business (for example, financial adviser) is “outsourced” to an external contractor.
2. Second generation outsourcing/re-tendering
Where a role carried out by an external contractor is given to a different contractor instead, through second generation outsourcing and/or a re-tendering process. There may be a few reasons for a business to go through this process; the contract is ending and they wish to explore more cost-effective options; they have had a negative experience with the current contractor; the current contractor is ceasing trade.
Where a role carried out by an external contractor is brought in-house to be carried out by the client instead. Whether or not this role was previously in-house prior to being completed externally does not matter in this scenario.
SPCs can be complex, so it’s important to seek legal advice if you feel your employer has breached TUPE regulations in this regard. When determining if an SPC has happened, your solicitor will need to check certain requirements were met, such as the identification of activities that describe the role/service and the identification of employees involved.
What is protected with TUPE?
Below is a list of the common protections outlined for employees under TUPE regulations:
- Retention of current contractual terms and conditions
- Continuation of existing holiday entitlements
- The right not to suffer a substantial detrimental change in working conditions after the transfer
- The transfer of any open cases/claims against the company
- The right to a continuation of non-“occupational” pensions, although the new owner would be under no obligation to continue using the same company
- Retention of current length of service
- If a redundancy occurs due to the transfer, employees’ have the right to claim unfair dismissal
- The right to be consulted by the employer on the ramifications of the transfer, before it takes place.
How long is TUPE valid for?
The short answer is indefinitely. The question is solely whether the action complained of was done by reason of the transfer, and not how long after the transfer it took place.
However, if the terms and conditions of an employee’s contract are changed several years after the business transfer it becomes more difficult to show that the transfer is the reason for the variation. Further, some contracts of employment expressly permit changes to be made, and are unaffected by TUPE, which we explain a little more below.
It’s important to seek legal advice in relation to this, to make sure you know the final details of your protection. Call us now on 0808 164 0808.
Can my new employer change my contract after TUPE?
Usually, if a new employer makes contractual changes, this would be classed as a breach of TUPE regulations. The employer would need to prove that the reason or principal reason for the changes is not the business transfer.
But, there are scenarios in which contractual changes can be made. These include scenarios such as the changes being permitted by the contract itself, or due to external factors such as company structure issues, technological issues involving equipment and affecting day-to-day business, or economic factors impacting on company performance.
It’s important to seek legal advice in this instance.
When does TUPE not apply?
As we mentioned above, there are exceptions to the TUPE Regulations, and certain types of business changes which will not trigger their application.
For example, there are scenarios with public sector organisations changing hands but remaining in the public sector, which wouldn’t be protected by TUPE law.
The question of TUPE regulations not applying or applying can be confusing, and if you’re in a transactional situation where you’re unsure, it’s always best to seek the advice of legal experts.
Contact our employment solicitors today
We understand the frustrations you may feel if you believe your new employer is breaching TUPE regulations, and making changes to your contract that are unlawful. Business changes can be unsettling for employees, which is where our team of employment solicitors may be able to help you.
If you wish to speak to us about Transfer of Undertakings (Protection of Employment) regulations in more detail, call us free on 0808 164 0808 or request a call back, and one of our team will call you.