Employment Rights – TUPE

Part 1 – Overview of the TUPE Regulations

Subject to certain qualifying conditions, the Regulations apply:

  • when a business or undertaking, or part of one, is transferred to a new employer; or
  • when a “service provision change” takes place (for example, where a contractor takes on a contract to provide a service for a client from another contractor).

These two circumstances are jointly categorised as “relevant transfers”.

Broadly speaking, the effect of the Regulations is to preserve the continuity of employment and terms and conditions of those employees who are transferred to a new employer when a relevant transfer takes place. This means that employees employed by the previous employer (the “transferor”) when the transfer takes effect automatically become employees of the new employer (the “transferee”) on the same terms and conditions (except for certain occupational pensions rights). It is as if their contracts of employment had originally been made with the transferee employer. However, the Regulations provide some limited opportunity for the transferee or transferor to vary, with the agreement of the employees concerned, the terms and conditions of employment contracts for a range of stipulated reasons connected with the transfer.

The Regulations contain specific provisions to protect employees from dismissal before or after a relevant transfer.

Representatives of affected employees have a right to be informed about a prospective transfer. They must also be consulted about any measures which the transferor or transferee employer envisages taking concerning the affected employees.

The Regulations also place a duty on the transferor employer to provide information about the transferring workforce to the new employer before the transfer occurs.

The Regulations make specific provision for cases where the transferor employer is insolvent by increasing, for example, the ability of the parties in such difficult situations to vary contracts of employment, thereby ensuring that jobs can be preserved because a relevant transfer can go ahead.

The Regulations can apply regardless of the size of the transferred business: so the Regulations equally apply to the transfer of a large business with thousands of employees or of a very small one (such as a shop, pub or garage). The Regulations also apply equally to public or private sector undertakings – and whether or not the business operates for gain, such as a charity.

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