Transfer of undertakings (TUPE)
TUPE applies when an undertaking or part of it is transferred from one employer to another where:
- all or part of a sole trader's business or partnership is sold or otherwise transferred
- a company, or part of it, is bought or acquired by another (if the second company buys or acquires the assets and then runs the business rather than acquiring the shares only)
- two companies cease to exist and combine to form a third
- a contract to provide goods or services is transferred in circumstances which amount to the transfer of a business or undertaking to a new employer.
TUPE can apply regardless of the size of the transferred undertaking, ie from large organisations employing thousands of employees to small businesses like a village shop with one assistant.
The Transfer of Undertakings (Protection of Employment) Regulations (TUPE) protects employees' terms and conditions of employment when a business is transferred from one owner to another. Employees of the previous owner when the business changes hands automatically become employees of the new employer on the same terms and conditions. It's as if their employment contracts had originally been made with the new employer. Their continuity of service and any other rights are all preserved.
Where there is to be a transfer of an undertaking the employer has an obligation to inform and consult with its workforce this could be either a Trade Union or workforce representatives. And let them know the transfer is happening and why, and how it will affect them.
TUPE does not apply to:
- transfers by share take-over because, when a company's shares are sold to new shareholders, there is no transfer of the business: the same company continues to be the employer
- transfer of assets only (eg the sale of equipment alone wouldn't be covered but the sale of a going concern including equipment would be covered)
- transfer of a contract to provide goods or services where this doesn't involve the transfer of a business or part of a business
- transfers of undertakings situated outside the UK.
On Thursday 31 October the department for Business Innovation and Skills published draft legislation to amend the TUPE (Transfer of an Undertaking) regulations. At this point no firm implementation date is set, but the regulations are proposed to take effect from a date to be confirmed in January 2014. Acas will produce good practice guidance to coincide with the release of the new regulations.
Following the implementation of the new regulations, the main changes will be:
- employee liability information should be provided 28 days before the transfer, rather than 14 days as previously
- there will be scope to negotiate changes to terms and conditions that derive from a collective agreement after 12 months from the transfer date
- a change in the location of the place of work will be explicitly included within the ETO reasons and so would not necessarily lead to automatic unfair dismissal.
Acas Conference - TUPE - Living with the Changes The Likely Impact of New Legislation, Solihull, Birmingham, 13 December 2013
Recent proposals to change the 2006 regulations are upon us. This conference is a must for delegates who wish to be ahead of the game in understanding the revised regulations
View details or book a place on the Acas Conference - TUPE - Living with the Changes The Likely Impact of New Legislation page.
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