The purpose of TUPE Law (Transfer of Undertakings (Protection of Employment) law) is to protect the employment rights of employees in the event the company they work for goes through a change in ownership.
The effect of the law is such that it moves all employees from their previous employer to their new employer on the same terms and conditions of work, providing employees with job security albeit that they no longer work for the specific employer with whom they contracted with. Additionally, the law ensures that all liabilities are equally transferred to the new employer. So if an employee made a claim against the previous employer before the transfer, then after transfer the liability of the claim would be on the new employer.
When do the TUPE regulations apply?
The TUPE regulations apply in the following two situations:
- Business Transfer – This is where a business, undertaking or part of a business or undertaking is transferred (sold) from one employer to another. To be protected by TUPE during a business transfer the identity of your employer must change.
- Service Provision Change – This is when a business either
- outsources or contracts out a service they previously undertook,
- brings a previously outsourced service’ in house’, or
- changes the contractor that was previously assigned to provide the service
In these situations all employees dedicated to the service contact will transfer over.
What if the employee does not want to work for the new employer?
If upon transfer, the employee do not wish to work for the new company then they can refuse to work and their employment contract will effectively end. They will be treated as having resigned and will not have a claim for unfair dismissal or redundancy pay.
Changes in the terms and conditions of employment
The TUPE regulations are designed to ensure that an employee’s pre-existing terms and conditions of employment remain intact upon transfer to a new employer. This means that the former employer cannot change their employment contract to bring it in line with the terms of the new employer, in anticipation of the transfer. But it also means that after transfer, the new employer cannot make changes to their employment contract unless the change proposed is because of
- the transfer itself, or
- a reason connected with the transfer that is not an economic, technical or organisational change
If the terms and conditions of their employment contract are changed for any reason other than the above stipulated, then any change will be void unless it is a positive change which the employee agrees to. If the employer refuses to comply with your pre-existing terms and conditions of employment then this would amount to a Breach of Contract.
If an employee is dismissed by reason of the transfer then the dismissal is automatically unfair and the employee may be able to bring a claim in the employment tribunal for Unfair Dismissal.
If an employee is dismissed due to a reason connected with the transfer then this too may amount to Unfair Dismissal unless the dismissal was for an ‘economic, technical or organisational reason requiring a change in the workforce’.
If you believe the TUPE Regulations may apply to your business please Contact us on 0800 6441544 for a free consultation.Contact us