Step 2: What to do before a transfer
There are things all employers should consider before making a decision on a potential TUPE transfer.
Considerations for all affected employers
First, you'll need to check if TUPE regulations apply to the transfer. Then, you'll need to consider how you'll keep staff informed and whether you may need to request or provide due diligence information.
Keep staff informed
Employers should keep potentially affected staff informed about any transfer plans. By discussing plans with staff early on and considering their views, you're more likely to:
- maintain morale
- understand and reduce any staff concerns early on
- build and maintain trust
- keep staff motivated in their work
- listen to ideas and suggestions from staff
- maintain good working relationships
You should think carefully about when is the best time to tell any potentially affected staff and how you'll communicate with them before, during and after the TUPE transfer.
If you decide to go through a TUPE transfer, by law you must also inform and consult staff representatives to explain why the transfer is happening and discuss any changes you're planning. Find out more about informing and consulting during a TUPE transfer.
Follow due diligence
Due diligence is a process where formal investigations are carried out to find out as much information as possible about the client, service or organisation the potential new employer is thinking of taking on.
It can include details like bonus payments or any enhanced contractual parental leave or redundancy pay.
The potential new employer may also want to request warranties and indemnities to protect their organisation from unexpected costs and liabilities.
Warranties are written statements confirming the employer selling the organisation or transferring the service has done something for the employer looking to take on the transfer, or certain information is correct. For example, confirming the information given about the pay and benefits of transferring employees is correct.
Indemnities are promises to pay compensation for a type of 'liability' (something a person is legally responsible for). For example, indemnity for any employment liabilities after the transfer, such as unfair dismissal claims.
Due diligence is voluntary, but the employer selling the organisation or service is more likely to find a potential buyer if they provide this information.
In a business transfer, due diligence is used to:
- assess risk
- confirm if the transfer is possible
- identify employment costs and other liabilities
In a service provision change, due diligence is used to:
- assess risk
- decide how much to bid for the contract
- identify employment costs and other liabilities
- decide if the service can be carried out with the funds available
The new employer should also make sure employees have all necessary employment checks and qualifications, for example if they have the right to work in the UK or any Disclosure and Barring Service (DBS) checks. Find out more about right to work checks on GOV.UK.
Employers must follow data protection law (UK GDPR) when using, storing and deleting personal data. For example, you must keep data secure and only provide or request the minimum information needed. Find out more about data protection from the Information Commissioner’s Office (ICO).
If you're thinking of taking on an organisation or service under TUPE
Before you decide to take on a TUPE transfer, you should consider things like:
- the benefits or risks – do the benefits outweigh the risks?
- how you'll manage the transfer
- how much you may have to bid
- costs, for example staff employment or redundancy costs
- if there's enough work for staff
- how the transfer will affect existing staff
- how to integrate new employees when they transfer
- whether trade union recognition will transfer
- how to manage staff who may have different terms and conditions
- any changes to working practices ('measures') you may need to take which relate to the transfer
- any risk of redundancies after the transfer
Estimate costs
You should consider any staff employment costs before you decide to take on a transfer. For example, costs of buying new equipment, any new work premises and staff wages.
How much you'll have to pay will depend on the size of the transferring workforce and whether they're paid higher wages than existing staff.
It's also important to consider whether you would have too many staff once the transfer happens. If so, you might need to make redundancies after the transfer and pay redundancy costs. Making redundancies or restructuring an organisation can be a long and costly process. Find out more about making staff redundancies after a TUPE transfer.
If you're thinking of transferring your organisation or service under TUPE
You should consider how a TUPE transfer might affect your staff and how you'll manage the transfer, including:
- the benefits or risks of the transfer
- whether there will be enough staff remaining after the transfer
- any changes to working practices ('measures') you may need to take which relate to the transfer
- ways you can reassure staff and reduce concerns, for example by sharing any transfer plans
Identify who will transfer
Once you've checked if the transfer is a business transfer or a service provision change, you'll need to identify which staff will transfer to the new employer.
In service provision changes, staff must be part of an 'organised grouping of employees' carrying out work for the 'client' (the organisation receiving the services). It's a good idea to identify who will be included in this group when you're considering a TUPE transfer.
Manage the transfer
You should think about how you’ll manage staff throughout the transfer, including how you'll:
- keep affected staff motivated about the transfer
- make sure work gets done to the same standard before, during and after the transfer
- retain knowledge and skills with your remaining staff
- manage workload after the transfer
Considering these points can help you work out if you're ready to go through a TUPE transfer. By thinking ahead, you're more likely to plan the transfer better and keep good working relationships with your staff.