Transfer of Undertakings (Protection of Employment) regulations, commonly referred to as TUPE regulations, are the rules that provide employees with protections when their employment is transferred to a new employer.

While complex, they form an important part of an employee’s employment rights, so deserve to be understood as clearly as possible.

What are the rights and protections provided under TUPE?

If an employee is protected by TUPE, it means the terms and conditions of their employment, as at the date of the transfer, will be preserved when the business or undertaking is transferred to a new employer.

These regulations also protect employees from dismissal if the reason for the dismissal is the transfer of ownership.

Any dismissal, whether before or after the date of the transfer, is automatically treated as unfair if the principal reason for the dismissal was the transfer itself (with some limited exceptions).

If a transfer of ownership is protected by TUPE, the employer is obliged to inform and consult with their employees in advance of the transfer.

In simple terms, TUPE means the new owners of the business cannot simply change the terms of an employee’s employment, and an employee’s number of years’ service will remain unaffected.

The new employer steps into the shoes of the former employer, taking on any duties, rights, powers, and liabilities associated with the transferred employees. However, the employer and employee can agree a change in the terms of employment in some circumstances.

To which employees or workers do TUPE regulations apply?

An employee is protected under TUPE if:

• they are legally classed as an ‘employee’
• the part of the organisation that is transferring is in the UK.

TUPE may also apply if only part of an employee’s job is being transferred, or where a contract has been outsourced to a new service provider, but the end client remains the same.

Do TUPE regulations apply to workers?

It is generally accepted that TUPE does not apply to ‘workers’, e.g. someone providing services via a third party, rather than a regular ‘employee’. However, there has been at least one situation in which a tribunal held that TUPE did apply.

It is likely there will be more cases on this point. If this situation potentially affects you, you should seek legal advice.

TUPE and employees who work overseas

TUPE may apply to overseas employees if their employer is based in the UK. However, what happens if a business ‘off shores’ or moves overseas is unclear, and may lead to a redundancy situation instead of a TUPE transfer.

This is a grey area that may warrant taking legal advice, should it affect you.

In what types of situations do TUPE regulations apply?

For TUPE to apply, there must be what is known as a ‘relevant transfer’. This refers to “the transfer of an economic entity which retains its identity”.

This may occur when a business or organisation (or part of it) is transferred from one employer to another. It can also happen when two businesses merge to form one new identity.

A TUPE transfer can also occur when a service is transferred to a new provider. This could be by way of a decision to outsource or insource a contract, or when a new service provider wins the contract, e.g. for cleaning or catering services.

However, it is not always clear cut. One example is where a business operates as one of several subsidiary companies, where staff work for other businesses within the group.

Factors that will need to be considered when deciding if an employee is covered by TUPE include:

• the terms of their employment contract
• how much of their work is done for the organisation
• what they do
• the way they are paid

TUPE does not apply to the supply of goods, or to one-off events such as exhibitions.

It does apply to public sector transfers, if the transfer is from the public sector into the private sector, or from one public authority to another.

What happens when TUPE applies?

When a relevant transfer is anticipated, the first step will be to identify which employees will be affected or covered by TUPE. The old and new employers should inform and consult with those people.

The outgoing employer should provide the new employer with all relevant information. Employment is then transferred with all the existing rights intact.

Are you involved in an employment transfer?

The application of TUPE is not always straightforward, and it is also an evolving area of employment law. If you are involved in an employment transfer, and you are not sure of your rights or obligations, it is worth seeking legal advice.

At Springhouse, our team of experienced employment law solicitors have the knowledge and experience to assist the parties involved with the transfer of undertakings.

Whether you are an employer trying to understand your obligations under TUPE, or an employee concerned about the prospect of unfair dismissal because of a transfer of ownership, our expertise can help guide you to a fair resolution.

For an initial discussion about your circumstances, please get in touch with our team today.