The Transfer of Undertakings (Protection of Employment) Regulations 2006, or TUPE, protects employees when they transfer from one employer to another where a business is sold or outsourced. Below we set out the changes to TUPE which apply from the 31 January 2014, although, how long they remain in force is open for debate (see below).
Changes to terms of employment: any change to an employee’s terms and conditions of employment will be void if the sole or principal reason for the change is the transfer, unless:
there is an economic, technical or organisational reason entailing changes in the workplace, including changing the location of the workplace (an ETO reason) and the new employer and employee agree the change; or
the change is allowed under the employee’s contract of employment.
Unfair dismissal: an employee will be deemed to be unfairly dismissed where the sole or principal reason for their dismissal is the transfer, unless:
there is an ETO reason; or
Service provision changes: for TUPE to apply, the activities carried out on, or after, the transfer of outsourced or tendered work, will need to be fundamentally the same as those carried out before the transfer.
Employee liability information: from 1 May 2014, the transferor will need to provide the new employer with employee liability information (age, identity and particulars of employment for each employee) 28 days before the transfer compared with the previous requirement of 14 days.
Collective agreements: collective agreements which exist on or before the transfer date will remain static. This means that any changes negotiated after the transfer will not be binding on the new employer unless they are party to the negotiating process. Furthermore, after one year the new employer will be able to change the terms and conditions stemming from any collective agreement once the change is no less favourable to an employee’s contract overall.
Redundancies of 20 or more: if the new employer believes they will need to make redundancies after the transfer, then collective consultation may begin before the transfer takes place once the transferor consents.
Small business exemption: any business with 10 or fewer employees does not need to invite employees to elect representatives to inform and consult with about TUPE, unless the employees are already collectively represented.
Employment law is never simple and it appears that Labour is intent on reversing the changes set out above which were brought into effect by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 (TUPE 2014). On the 28 February 2014, Labour filed a motion to have TUPE 2014 annulled. Unfortunately, this means that the above changes, while currently law, may change in the near future, especially if Labour wins the next general election.
TUPE is a complex (and ever changing) area of law and each case turns on its own facts. If you are in any doubt regarding your legal obligations, please contact a member of our Employment team.