TUPE is an acronym for Transfer of Undertakings (Protection of Employment) Regulations and covers the regulations guiding the transfer of a business from an existing employer (called the outgoing employer) to an incoming employer. It aims to protect the rights of the employees working for the business being transferred.
Why is TUPE relevant to the employer?
The TUPE regulations apply to all types of businesses and impacts daily business transactions of different sizes. This is why the employer should be aware of the legal implications of any business transfers in the United Kingdom. These include:
- When a business is sold or transferred either in part or as a whole entity.
- When a company acquires part of all of another company and runs it.
- This doesn’t apply to buying shares of another company or business.
- Business mergers; where two companies merge into a third new business entity.
- Contracts that provide services or goods which are part of a business transfer to a new employer.
Any business transfers that don’t fall under these categories, like share sales, equipment and asset purchases, and service contracts transfers that don’t amount to a full or partial acquisition of the business are not covered by TUPE regulations.
How can the employer comply with TUPE?
Any outgoing employer involved in the business transfers or transactions covered by TUPE regulations needs to follow these steps to make sure to comply with these rules:
- Discuss the transfer with employees
- It’s the outgoing employer’s responsibility to inform the affected employees or their representatives of the proposed transfer and the measures involved.
- Failure to inform employees could lead to complaints against the outgoing employer to the Employment Tribunal and risk facing large claims.
- Inform the incoming employer of employee liability details
- The incoming employer has the right for information about employees affected by the transfer including disciplinary records and employee claims not later than 28 days before the date of transfer.
- Outgoing employer insolvency
- In cases of outgoing employer insolvency, the incoming employer will not be responsible for liability of redundancy and notice payments.
The TUPE regulations are set to protect employee’s rights in cases of business transfers. The employer should be aware of the transactions covered by these regulations and their legal responsibilities in such cases.