Business Law

TUPE - A Guide for Employers

If you are buying or selling your business, or merging your business with another, TUPE will apply to this transaction.  TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations. 

TUPE applies to most business transfers and also to outsourcing.  If an employee works for your business, and you are transferring your business to another business, TUPE requires that your employees transfer their employment to the transferee.  They would transfer under the same terms and conditions (e.g. pay, holiday, hours etc.) and with continuity of employment. 

Both you and the transferee of your business have duties to inform the employees of both organisations of your intention to make such a transfer, and you will also have duties to consult employees who may be affected by the transfer of the business.  If employees are not properly informed or consulted then they will be able to bring a claim in the Employment Tribunal for compensation of up to 13 weeks’ pay each.  If an employee is dismissed because of the transfer, or a reason connected with a transfer, then this will be an automatically unfair dismissal.  An employer may have a defence to such a claim if it can show a valid reason under the Regulations for making dismissals. 

TUPE also covers outsourcing arrangements.  So, for example, if you outsource an element of your business, such as cleaning or IT, your employees in those fieldswill transfer to the organisation which takes over that element of your business.  If you are a sub-contractor, and you are either winning that business from another sub-contractor, or losing it to another sub-contractor, again, the employees transfer at that point.  This would also apply with formerly outsourced work being brought back in-house. 

This is a very complex area of law, and can be expensive for employers if they get it wrong.  This has only been a very brief overview, and if you need advice with regard to TUPE and your business, please contact Marina Vincent on 020 8422 5678.

If have TUPE issues and would like to speak to us about our employment services, please contact Harold Benjamin employment lawyers team for employment law in London and Nationally.