What is TUPE?

It is difficult to know which is the most off-putting, the acronym TUPE or the full title, Transfer of Undertakings (Protection of Employment) Regulations 2006.

Either way, TUPE is the Government’s way of implementing in the UK the European Community Acquired Rights Directive 1977 as amended.

Essentially, both TUPE and the Acquired Rights Directive are designed to protect the rights of employees when a business or an undertaking transfers from one employer to another.

The employee rights to be protected include:

• Contractual terms – rate of pay, sickness arrangements, holidays, and benefits
• Continuous service
• Union agreements

 

Separate provisions apply to occupational pensions in the Pensions Act 2004 and in codes of practice for public sector transfers.

Under European law, the purpose of the Directive – “to safeguard the rights of employees transferring” – is a test against which all actions should be measured.  TUPE 2006 also brings in new definitions and provisions so clients should ensure that they have up to date advice.

When and where does TUPE apply?

It can apply when a “business transfer” occurs transferring an undertaking or part of one to another employer.

It can also apply to “service provision changes” where an “organised grouping of employees” carrying out activities for a client is contracted out, assigned to a new contractor or brought back in house.

Whether TUPE applies to a situation where a new service provider is appointed is still a question of fact, and, whilst one factor alone is not conclusive or dominant, we are able to give authoritative advice based on our understanding of the changing legislative background and our experience in managing such situations.

Working in partnership with our clients

Our client can be the person wishing to transfer or oversee the transfer or an incoming or outgoing contractor or employer.

The starting point is often at tender or contract stage and we can work with clients on due diligence or tender submissions.  We can also offer a partnering arrangement where the tender requires the tenderer to demonstrate their understanding and expertise in handling TUPE issues.  Upon award of contract, we can work with the client on implementation.

Working life is a continually changing scene and change will not stop because of TUPE.  The management of this change under TUPE, however, will require a service organisation with in-depth resources and expertise.

Our experience in this field is second to none.  The usual procedure would be for the client to meet with ProjectHR to identify the issues and to determine a bespoke solution.  Support can then be remote and advisory or on-site and hands-on - the client decides.  ProjectHR can also liaise with any third parties involved such as a tendering body, buyer, seller or other contractor.

Together, the client and ProjectHR will agree a plan for each stage of the transfer programme.  This is likely to include: 

1. Identifying the issues, legal obligations, hurdles and solutions
2. Agreement of terms and conditions being transferred
3. Agreement of working arrangements post-transfer
4. Consultation with employee representatives or with a  recognised trade union, if appropriate
5. Consultation with individual staff

Managing Change

The Regulations require outgoing and incoming employers to consult with employee representatives prior to a transfer “with a view to reaching agreement”, and we can advise on the steps that should be taken to comply with these consultation requirements and the information which has to be provided.

At the time of the transfer, it is not possible to institute unilateral changes in headcount, hours of work, structures, etc, simply because of the transfer.  Such changes, should they be required, may be within the law, however, if they are agreed by those affected (and the majority of change occurs through discussion and agreement).

Alternatively, changes can be introduced if they are for “an economic, technical, or organisational reason entailing changes in the workforce”.  This provides an opportunity for creative thinking and we can advise on managing post-TUPE changes.

ProjectHR can train all key client operational management and sales staff in the intricacies of TUPE and clients can be assured of up to the minute professional support.

Issues for Employees

TUPE means that staff are protected during the transfer and retain their terms and conditions of employment and continuous service.  It is as if their contracts of employment had originally been made with the incoming employer.  In our experience, employees who have been consulted and involved in the process will transfer with the minimum of fuss and reluctance.  An employee can object to the transfer, but a refusal by an employee to transfer terminates the employment, and there is no recourse to tribunal or requirement for notice of termination.

Most situations are resolved voluntarily through consultation and negotiation.

In more complex situations, we can access a team of legal advisers experienced in giving timely and pragmatic advice in this area.

Summary

At first glance, the Transfer of Undertakings Regulations create a situation of immense complexity and difficulty with ever changing case law and now TUPE 2006 to contend with.  In truth, they represent the classic situation of being interpreted as either a major problem or an unresolved opportunity.  With the application of expertise and creativity, they can be accommodated to the mutual benefit of client and third party or support service provider.

This is the one piece of employment law that you should not try and guess.

Take advice from our leading expert at PROJECTHR LTD.

Note:
This webpage is designed to help visitors understand and comply with their obligations under TUPE.  It gives general guidance only and should not be regarded as a complete or authoritative statement of the law.