Transfer of undertakings (TUPE)
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. Both old and new employers are required to inform and consult employees affected directly or indirectly by the transfer.
Questions and answers
Which transfers are covered?
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.
Which transfers are not covered?
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.
What happens during a transfer of undertakings?
If you feel you have been unfairly dismissed because of a transfer, you should raise the matter by way of your employer's internal procedures. If this doesn't resolve the issue, you ultimately have the right to complain to an employment tribunal if you've been employed continuously for a year or more, or two years for employees starting employment on or after 6th April 2012.
If you were employed immediately before the transfer (or if you would have been had you not been unfairly dismissed for a reason connected with the transfer) you automatically become an employee of the new employer, unless you object to being transferred and inform either employer. Your continuity of employment is not broken and you keep all the rights and obligations under your contract of employment with your previous employer.
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Acas West Midlands Conference - Slaying the Dragon, Simplify TUPE in a day - 18 June 2013
Business transfers, outsourcing, being sold off, privatised - whatever it's called, TUPE is a major headache for employers and scary for employees. A TUPE transfer or outsourcing of a contract is one of the most difficult, confusing and stressful areas of business activity for all of us. Or is it? This special Acas conference will help explain and simplify the TUPE process.
See the Simplify TUPE in a day page for more details
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