TUPE (Transfer of Undertakings Protection of Employment Rights) is a process that protects employees when their employment changes to a different employer. TUPE can also apply when a service transfers to a new provider for example when a cleaning contract changes hands. Deciding whether TUPE applies can be a challenge and is something the Government have talked about simplifying.

Is the situation truly TUPE?

Decide if the employee’s role is transferring to another employer (or at least 50%+ of their role is transferring) or is the service being taken on by another employer. Is the part of the organisation that is transferring based in the UK? The size of the organisation doesn’t matter in a TUPE situation. The main assets of the business will be transferring to the new employer and the business activities will be the same or similar as before for TUPE to apply.

What is involved in due diligence?

The potential new employer should carry out a formal investigation to find out as much information about the employees who will be transferring. This is usually in the form of a questionnaire or letter asking questions about the transferring employees such as salary, other remuneration, date of joining, type of contract, job title, pension, holiday entitlement, hours of work, notice period, place of work and any current disciplinaries or legal cases relating to the employee. The information you receive can help you to assess risk and to identify employment costs and liabilities.
Terms and conditions of employment should be compared between the two employers and the new employer should write to the first employer outlining any measures that need to be taken in view of differing terms. Pension schemes will be different and one employer may recognise a union and the other may not, for example.

What happens in the consultation meeting?

Prior to a TUPE transfer both employers should consult with the affected staff. This can be via union representatives or employee representatives. In practice, in a situation where 10 or less employees are affected the employees will usually be consulted with directly.
A formal announcement should be made with a follow up letter explaining the situation followed by consultation meetings.
Employees have the right to be accompanied by a trade union representative or colleague when attending consultation meetings. Each meeting should be followed up with a letter confirming what was discussed and a letter issued.
Staff may not wish to engage in consultation meetings and that is their prerogative but ensure they have all the necessary information in writing.

What happens if an employee refuses to transfer?

It is not uncommon for employees to be unhappy about transferring to a new employer. If after consultation the employee says they object to the transfer then their employment ends at the date of the transfer. This is not viewed as a dismissal and no compensation is payable.
It is wise to be cautious when coming across this situation and if the employee feels they are being constructively dismissed or there is likely to be a substantial difference between the employee’s current terms and the new terms then these may be grounds for a claim at the Employment Tribunal.
In this circumstance, the employee should state their wish in writing not to transfer before the transfer date or they will automatically transfer to the new employer.

If you need help and guidance in a TUPE situation, then do get in touch with me at liz.jewer@hrthink.co.uk.

Get in touch

Contact Liz Jewer on 07803 007591 if you need advice about this topic or HR related services HR Think offer.