TUPE for Employees

What is TUPE?

TUPE is an acronym that stands for “Transfer of Undertakings (Protection of Employment)” and consists of a series of rules that employers must follow to ensure that your rights as an employee are not infringed upon during a “relevant transfer” (more on this later).

The main provisions concerning TUPE transfers are contained in the 2006 TUPE regulations. Both your former and new employer must observe these provisions with extreme diligence as they deal with matters of job security and stability.

The main goal of these regulations is to preserve the same conditions you enjoyed before the transfer as if it hadn’t happened. This has legal implications for new employers, who must strive to deal with your concerns even if they emerge before taking the helm.

Am I Protected under TUPE?

You’re entitled to TUPE protection insofar as:

• You have employee status
• The part of the organisation that’s being transferred is located in the UK

You are considered an employee if, among other things:

• You’re demanded to perform work for the company regularly
• You can’t send other people to do the work for you
• You’re under the direct supervision of a manager or supervisor
• Your contract lays out a disciplinary procedure
• You work at the company’s establishment or an assigned space
• The materials you utilise are solely supplied by the entity you work for
• You are obliged to accomplish a minimum number of working hours per week

It’s not necessary to meet all the conditions described above to be catalogued as an “employee”, though at least you should fulfil most of them.

You could potentially be protected as a worker as well. A recent decision by a London employment tribunal ruled that workers were also covered by TUPE regulations just as much as employees, leaving the question open for discussion in this regard. Even though it’s not a binding decision, it’s undoubtedly a significant precedent.

What Is a “Relevant Transfer”?

You may only invoke TUPE protection if immersed in a “relevant transfer”. A “relevant transfer” is when an undertaking located partially or wholly in the UK is transferred from one person, company, or firm to another. It can refer to a full business transfer or a service provision change. Let’s explain these situations briefly:

Business Transfer

A business transfer involves the partial or total turning over of an economic entity or undertaking from one employer to another. This could entail a merger – whereby two companies are joined together to form a new entity – or a takeover – a larger company that absorbs a smaller one. TUPE only protects you if the identity of the employer changes.

Service Provision Change

We may point to three scenarios where a service provision change happens:

• A service that is provided in-house by the company (such as workplace catering or cleaning) is placed under the responsibility of an external provider
• An outsourcing contract ends and is awarded to a new contractor
• Such a contract is terminated, and the service is transferred back in-house

You won’t enjoy TUPE protection if the contract is:

• For short-term work or a single event. An example of this would be a security company that was only meant to provide services for a special corporate event or series of events and which was replaced down the road
• For the supply of goods, such as a company switching from one office material supplier to another

A service provision change is considered a “relevant transfer” if:

• An organised group of employees was engaged in these activities as their “principal purpose” (determined by the amount of time they dedicate to them, among other factors)
• The company decides that these activities will be carried out by a transferee instead
• The activities are essentially the same before and after the transfer is completed

Does TUPE Apply to Inter-Group Transfers?

TUPE applies to inter-group transfers – as in, activities that are carried over from one group subsidiary to another – only when the legal identity of your employer changes. An Employment Appeal Tribunal ruling in September 2015 (Hyde Housing Association Ltd and others v Layton) emphasised this. However, this tribunal also recognised that, on some occasions, the reality differs from the legal labels utilised.

What About Cross-Border Transfers?

Transfers are “relevant” for TUPE even if the transferee is not located in the UK.

However, genuine redundancy will exist in this context if your work is no longer needed at the employer’s UK facilities, even though this might not excuse employers where there is a possibility of relocating you or offering you alternative positions.

During a TUPE Transfer, What Are My Rights as an Employee?

In the course of a business transfer or service provision change, you have a set of rights that must be observed by both your former and new employers. These are:

Right to Be Consulted and Informed

Your employer must initially speak with the trade union or your appropriate representatives to:

• Inform that a transfer is happening, as well as when it will take effect and why
• Explain how the transfer may impact your working conditions
• Tell them whether there’ll be a reorganisation
• Disclose the number of agency workers used and the types of work they do

Your employer can consult affected employees directly if the company has less than ten employees.

If you are not being transferred but are still affected by the transfer in some shape or form, you also have the right to participate and be informed by your employer or your representative. You should also be invited to voice your thoughts and offer suggestions.

Even though your employer is not obliged to acquiesce to all the suggestions made in the discussions, they must at least show that these suggestions were taken into account and give a written explanation of the reasons for their rejection.

Elections of Employee Representatives

Your employer would have to hold elections for employee representatives in the absence of already-elected ones or an established trade union, provided that there are more than ten employees working for the entity.

These elections must guarantee that you and every other affected person are wholly represented. The candidates themselves should also be among the affected crowd.

If you are an affected employee, you reserve your right to run for representative, and your employer cannot unreasonably exclude you from being a candidate or voting.

Notice

Your employer is not bound to give notice within a specific timescale, as your employment contract is not necessarily ending. However, the information about the transfer has to be shared with reasonable anticipation. The time it may take before the information reaches you hinges upon the organisation’s size and the scope of the transfer.

Right to Keep the Same Terms and Conditions

Your new employer under TUPE is obliged to assume your employment contract and the obligations that result from it. This would include:

• All the terms and conditions that were valid up to the time of transfer
• All the liabilities and breaches the previous employer had to account for (e.g., unpaid wages or benefits, discrimination claims, etc.)
• All your holiday entitlements
• Your period of continuous employment from the original start date
• The individual and collective agreements previously made

Your existing employment rights should not suffer any change after the transfer unless there is an economical, technical, or organisational reason (ETO). In those cases, you’d still have to agree to the change, and the transfer itself cannot be its principal or sole reason.

Even positive changes (e.g., pay increase, more holidays, a company car, etc.) should not be done without your input, though there’s usually more leniency in this respect.

Your pension rights attained before the transfer was made effective are also protected, albeit your new employer may decide to move forward with another pension.

You should receive an updated written statement detailing their name and highlighting that your existing terms and conditions haven’t changed.

In the same way, your old employer is responsible for providing the new employer with all the relevant information about you, such as:

• Your name and age
• Main details about your employment
• Grievance and legal actions you raised in the past two years, including those that are underway

Your new employer will bear the burden of dealing with ongoing grievance procedures and tribunal actions. If you raise issues that the transferee was unaware of, it’s still their duty to resolve them, and they cannot withhold their commitment under the excuse that these issues were brought up against your previous boss (save for transfers during insolvency, which we’ll touch upon below).

Right to Not Be Dismissed or Made Redundant Because of the Transfer

Likewise, you cannot be dismissed or made redundant solely or mainly because of the transfer. Your employer could still fire you if you indulged in gross misconduct, received negative performance reviews, or due to any other valid reasons among those listed in the Employment Rights Act 1996.

If you are made redundant for an economical, organisational, or technical reason, you may reserve your right to receive a redundancy payment. Moreover, a selection process must be undertaken beforehand by which eligible employees would be evaluated according to a specific set of criteria and an objective scoring system.

Right to Recognition of Trade Unions and Their Representatives

If your previous employer recognised a trade union that you represent, belong to, or support, the incoming employer is not free to derecognise it unless certain conditions are satisfied, to wit:

• The number of people employed is lower than 21
• The number of members in the bargaining unit drops below 50%
• The workers in the bargaining unit no longer give their support to the union

TUPE During Insolvency

You’re not under TUPE protection if the business is liquidated or bankrupt. In that case, your old employer would have to make you redundant.

Nevertheless, if the insolvent business is taken over by another company, different TUPE rules may apply. In an attempt to prevent job loss, your new employer may have to change specific terms and conditions or reduce pay. In like manner, they’re not liable for any debt your old employer owed you, as the latter still assumes the obligations they may have with staff members and providers.

In any event, changes to employment contracts must be made after reaching an agreement with employee and trade union representatives. These agreements must not, in any way, infringe upon your statutory rights. For example, a deal made in this context would not be allowed to deprive you of your holiday leave/pay or your right to receive the National Minimum Wage at the very least.

How to Claim Owed Amounts

If your former employer still owes you money, you can attempt to claim it by applying to the Redundancy Payment Service (RPS).

To apply, you must have a case reference number beginning with CN, which should be given by the insolvency practitioner managing your former employer’s judicial process.

There are two application forms you can fill in online:

• RP1: Claim for redundancy and other money you’re owed by your employer. With this form, you can ask for redundancy pay, arrears of pay, or holiday pay, among others
• RP2: Claim for loss of notice pay. For statutory notice pay, which also goes by the name of payment in lieu of notice (PILON)

Both applications are processed separately within six weeks of gathering information from the insolvency practitioner.

If My Employer Didn’t Follow the TUPE Procedure Correctly, What Can I Do?

TUPE regulations are highly complex and can severely distress the parties involved, especially when dealing with an insolvent business. While this does not justify any lack of compliance, it’s always good practice to send friendly reminders and resolve any mishap informally and amicably, provided that this doesn’t hinder your possibility of taking future legal action.

Nonetheless, suppose your employer fails to comply with their statutory obligations under TUPE. In that case, you could eventually raise a complaint at an employment tribunal, which could lead to a damage award equivalent to a maximum of 13 weeks’ uncapped pay. This award could be paid by either your old or new employer indistinctively, as they may have joint liability in many instances.

Dismissal and Redundancy

If you’re being dismissed due to the transfer (as a sole or principal reason), you can make an unfair dismissal claim at an employment tribunal regardless of your time in the company or firm.

Normally, you’d have to be working for the same employer for two continuous years before being able to make any unfair dismissal claims, but in this specific scenario, the reason for the dismissal is considered “automatically unfair” according to UK employment law, which exempts you from the 2-year rule.

Likewise, if the conditions changed to your detriment during or after the transfer, you’re entitled to resign and claim constructive unfair dismissal on the grounds of a severe contract breach.

Get Help from Professionals

TUPE regulations are challenging to comprehend, let alone enforce. This lack of clarity could produce anxiety and uncertainty when you are entrapped in the middle of a transfer.

Our employment firm is well-versed in every aspect of TUPE, with years of experience and a vast number of satisfied clients to pride ourselves on. You can assuredly count on us to help you handle every single instance of mismanagement on the part of your old and new employer alike, including those in which:

• You were unfairly dismissed as a result of the transfer
• Your terms and conditions were changed for the worse
• Your new employer won’t recognise your acquired rights
• You were left out during the talks between the employers and the employees affected by the transfer

If you seek support in denouncing any infringements made by your old or new employer during a transfer of undertakings, call 0333 305 9375 and schedule an appointment with one of our employment lawyers.