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TUPE regulations require that both the outgoing and incoming employers inform and consult with employee representatives or a trade union before transferring ownership occurs. As an employer, it’s important to remember that this information must be provided to employees with enough time to allow for ‘meaningful consultation’ on the issue. If you don’t do this, you can be penalised. An employer has to consult employee representatives about any part of the transfer that is likely to affect employees and then seek to reach an agreement. The consultation should cover: That the transfer is going to happen, when it’s happening and why. How the transfer is likely to affect employees – for example, could employees have to use new systems, or integrate with new teammates? Whether the new employer might consider something like redundancy or restructuring the business. If your business has fewer than 10 employees, you can inform and consult directly with employees themselves.
There are two situations where TUPE regulations apply – business transfers and service provision transfers. Let’s take a look at each of them in a bit more detail. Business transfers – TUPE applies if a business – or part of a business – moves over to a new owner or merges with another business. The identity of the employer must change to qualify for protection under TUPE Regulations. Service provision transfers – The regulations apply if services are outsourced. This could take shape as a contractor taking over a service that was previously done in house (known as outsourcing), a new contractor taking over services from a previous contractor (known as re-tendering), or an outsourced contract is transferred in house.
When it comes to redundancies, a new employer can’t make employees redundant based just on the transfer. If an employer were to be made redundant with the main reason being the transfer, it would likely be viewed as unfair dismissal by an employment tribunal. However, if an employee is made redundant because of one of the ETO (Economic, Technical or Organisational) reasons above, they may be entitled to a redundancy payment. If a redundancy or dismissal was going ahead regardless of the transfer, TUPE wouldn’t make any difference. Employees do have the right to refuse to work for a new employer. If the employee tells their employer or the new employer that they wish to leave, their employment will end at the transfer time.
When a new employer takes over a business, TUPE regulations state that they have to take over their new employees’ employment contracts. Their terms and conditions of employment will transfer – along with holiday entitlement and length of continuous employment. It’s a breach of contract if a new employer fails to meet the terms of the existing employment contracts. However, a new employer can change an employee’s terms and conditions if the reason is economic, technical or organisations (ETO) – which broadly relate to company performance, technical process or company structure. The new employer can actually introduce changes to terms and conditions that are favourable to the employee – for example, increasing annual leave to bring everyone to the same amount of annual leave.
TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations 2006. Any transferring employee will transfer on the same terms and conditions. The only rights and obligations which don’t transfer are criminal liabilities, as well as these benefits (under an occupational pension scheme):
– old age benefits
– invalidity benefits
– survivors’ benefits.
This is known as TUPE’s pensions exception, but there are still certain minimum rights that the Transferee must provide.
A transferring employee will have their terms and conditions protected, apart from where they can be changed because of an economic, technical, organisational (ETO) reason that requires a change in the workforce. It’s not enough to simply want to streamline current and new employees’ terms and conditions & you must have an ETO reason.
If the Transferee plans to alter terms and conditions, for a valid ETO reason, then the same consultation procedure must happen as in any other variation in terms.
For more information on TUPE, check out our free introductory guide here. Or, you can check out our free guide to moving premises here.
When you work with us, our team becomes part of your extended team. We’ll provide advice and help you to gain a deeper understanding of TUPE regulations, while helping with the more practical aspects of a business acquisition or sale.
For support with TUPE, speak to one of our HR & Employment Law consultants. Simply call 0345 844 1111 to find out more.
No – if it’s before the transfer date. An employee who doesn’t want to work for the Transferee can make that clear before the transfer date, and then they won’t transfer across. Objections after the transfer generally won’t be valid – the only time it might be is if the employee did not know the identity of the Transferee until that point. For support with TUPE, speak to one of our HR & Employment Law consultants. Simply call 0345 844 1111 to find out more.
‘Consult’ is when the current employer asks for and considers employees’ feedback on the changes to working practices (‘measures’) that the transfer will bring before making a decision.
‘Measures’ is a broad term and includes any action, step or arrangement involved in the transfer that will affect employees.
Examples of measures which would cause to a duty to consult are:
– A change to the location where an employee performs their work.
– A change to incentive arrangements.
– A change to shift patterns or rotas.
– Job losses or redundancies.
– A change to the duties to be carried out by the employee.
– A change to pay date or pay interval.
If measures are planned for the affected employees, then the Transferee also has to consult with their representatives. This starts the consultation period.
There’s a set way of carrying out TUPE consultation, for more information call 0345 844 1111 to speak to our expert team.
The TUPE consultation procedure ends when:
– The final meeting between the Transferee and employee representatives takes place.
– All measures have been fully discussed and, if possible, agreed
– Any proposals from employee representatives have been responded to in full.
Minutes of the final meeting should be signed confirming the end of the consultation, or a letter indicating the end of consultation should be given to the representatives.
The end of the consultation procedure should also be communicated directly to affected employees by letter or email.
For direct support with TUPE and the end of the consultation procedure, including on-site support from one of our experts, partner with us today! Simply call 0345 844 1111 to speak to one of our team.
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