The Transfer of Undertakings (Protection of Employment) Regulations 2006 or “TUPE” protects employees when the business in which they work is sold or the services in which they work are outsourced, in-sourced or carried out by a new contractor. The contracts of employment of relevant employees automatically transfer under TUPE from the old employer (the transferor) to the new employer (the transferee). There is an obligation on employers to inform and consult with their employees who are affected by the transfer.
What does TUPE say?
TUPE says that where there is to be a transfer of employees under TUPE employers must inform affected employees of certain information, namely:
- the fact that the transfer is to take place, the date or proposed date of the transfer and the reason for it
- the legal, economic and social implications of the transfer for any affected employees
- the measures which the employer (itself) envisages taking in connection with the transfer
- the measures which the transferee is expected to take after the transfer in respect of the transferring employees
- various information regarding agency workers working for the employer
Where “measures” are envisaged by an employer as a result of the TUPE transfer, there is an additional obligation to consult with appropriate representatives (such as trade union or other workplace representatives elected by staff).
Measures are essentially things that will happen due to the transfer and the new employer taking over the employees’ employment. It may be something regarded as positive or negative for the employees. For example, a change of location of work, a change to benefits such as the pension scheme, a change to the date on which employees are paid each month, changes to working conditions or shift patterns and any job cuts proposed.
Which employers must consult and which employees are affected?
Both the transferor and the transferee must inform and consult with their employee representatives if they have employees who may be affected by measures taken in respect of the transfer. Both transferring employees (those who will go across to the transferee) and non-transferring employees (those who will stay with the transferor and the transferee’s existing employees) could be affected employees and therefore all have the right to be informed and consulted (via their appropriate representatives).
What is “consultation”?
Consultation by the employer must be meaningful and with a view to seeking agreement but, agreement does not actually have to be reached. TUPE requires only that employers consider any representations made and explains why they are rejecting any such representations.
How long must consultation last?
Unhelpfully, TUPE does not actually specify how long employers must consult with employee representatives! All it says is that the required information must be given “long enough before a relevant transfer to enable the employer of any affected employees to consult with the appropriate representatives of any affected employees…”
Consultation should continue until either agreement as to the measures envisaged has been reached, or, it is clear that there is no prospect of further agreement between the parties. This will obviously depend on the facts of each case; how many measures are proposed and how controversial they are. Unless the measures proposed are extremely minor, it seems unlikely that a process of meaningful consultation could be concluded in much less than two weeks, assuming that appropriate represntatives were already in place and no elections had to be held.