What is TUPE and how does it work?

In any business, changes are inevitable – and whether it’s through mergers, acquisitions or contracting out services, businesses often go under structural changes. For managers, employers and business owners, understanding the legalities surrounding these changes is really important, especially when it could affect employee rights. Enter Transfer of Undertakings (Protection of Employment) regulations – or TUPE.

 

What is TUPE?

Like we’ve already said, TUPE stands for Transfer of Undertakings (Protection of Employment), and it’s essentially a legal framework that makes sure employees’ rights are protected when their employment is transferred to a new employer. The term ‘understandings’ refers to any type of business or part of a business, and a ‘transfer’ happens when a business, or part of it, changes hands from one employer to another.

The origins of TUPE come from European Union (EU) law, where it was put in place to give employees protection in situations where they’re transferred to a new employer. The main goal of TUPE regulations is to make sure that employees don’t lose their jobs or experience any harm in terms of their employment rights during these transfers. Basically, TUPE provides job security and continuity of employment for workers affected by business transfers.

 

Key regulations of TUPE

It’s essential to understand the key regulations of TUPE, for both employers and employees.

One of the fundamental rights under TUPE is the continuity of employment. This means that employees keep their existing terms and conditions of employment when they transfer to a new employment. Plus, TUPE provides protection against unfair dismissal, making sure that employees can’t be fired or made redundant just because of the transfer itself.

You also have to inform and consult with representatives of affected employees about the transfer. This could involve providing details of the transfer, its implications and any measures that need to be taken in relation to employees.

You’ll need to handle any changes to employment terms carefully – changes can only be made if they’re for economic, technical or organisational reasons involving changes in the workforce.

 

When does TUPE apply?

TUPE regulations come into play when there’s a transfer of business or a change in service providers.

Business transfers

A business transfer happens when a business or part of a business is sold or merges with another business. This includes mergers, acquisitions and the sale of a business. During these transfers, TUPE makes sure that all employees employed by the business being transferred move to the new employer with their current rights intact. Both parties involved in a transfer need to clearly understand which employees and which rights are included as these could affect the business operations.

Service provider changes

These might happen when a company contracts out, reassigns or brings any particular service back in-house. This typically involves outsourcing things like catering, cleaning or IT services. For example, if a business decides to switch its catering service provider, TUPE makes sure that the employees working for the original service provider are transferred to the new provider, with their employment terms unchanged. These regulations are vital for preventing job loss and keeping up stability where operational shifts might take place.

 

How does a TUPE transfer work?

The process of a TUPE transfer involves several steps, which are all designed to make sure the transition is smooth for both the business and the employees. It begins with initial planning and notification – basically, when an employer anticipates a transfer, they need to notify the affected employees and their representatives as soon as possible.

After this, there needs to be an employee consultation. You’ll need to discuss the transfer with employees, address any concerns and answer questions. The goal is to make sure the process stays transparent and that any resistance or anxiety about the transfer is reduced.

For a smooth transfer, it’s vital for employers to put effective communication strategies in place and help keep employees informed and engaged to help ease the transition. Staying compliant with the law is the most important part in a TUPE transfer, so if you’re not sure about anything, it’s best to consult a legal expert to make sure you’re sticking to the law and avoiding any potential disputes.

 

Common challenges and solutions

TUPE transfers aim to protect employees, but they’re not without their challenges. One common issue faced in a TUPE transfer is resistance from employees who might be apprehensive about the change. To tackle this, you should engage with employees early in the process, provide clear information and address concerns. Building trust and maintaining open communication can significantly reduce the resistance you might face.

Legal disputes could also come up if there’s not enough clarity around TUPE obligations. To prevent this, you should seek legal advice and make sure you fully understand your responsibilities under TUPE.

 

We’re here to help.

Here at Citation, we provide a specialised TUPE advice service to help you with TUPE transfers. There’s a chance you could struggle even if you’ve been running a business for years, because TUPE can get complicated. Bring us on board to make sure everything goes smoothly. Find out more by filling in the form on this page or calling 0345 844 1111.