Business Transfers + TUPE Solicitors
TUPE regulations are designed to safeguard employees’ rights on the transfer of a business. It means that employees’ terms and conditions are preserved when a business is transferred from one employer to another, or is merged and the identity of the employer changes.
Similarly, where a task or activity is no longer carried out by one person or organisation, and moved to another (Service Provision Change), TUPE protects the employment rights of the employees affected by that transfer.
TUPE legislation is complex and might seem overwhelming for an employer, but it is vital you get it right.
Employee transfers might also provoke feelings of uncertainty in the workplace. It’s therefore important to seek legal advice as soon as possible in order to help both you as the employer and employees understand the process. This can also ensure the business transfer is undertaken with as little stress and uncertainty as possible.
Need TUPE advice as an employer?
Our specialist employment solicitors can advise employers at an early stage of any business transfer to ensure that they comply with what is required under TUPE. We can help avoid any possible liability which could lead to an employment law claim being made against them.
When do TUPE regulations apply?
There are two types of transfer where TUPE applies:
- Business transfers: when a business or undertaking (or part of it) is sold or transferred to another employer.
- Service provision changes: this is when contracts are taken over (see below for more detail). Sometimes the business transfer itself can bring about a service provision change.
The seller of the business (the ‘old’ employer) is referred to as the ‘transferor’, and the recipient (the ‘new’ employer) is known as the ‘transferee’.
It is vital to establish what is or is not being transferred at an early stage. There are exceptions to where TUPE applies, for example, when the old employer is transferring the supply of goods to the new employer, but nothing else.
What is a service provision change?
A service provision change involves the transfer of activities between parties. It includes:
- Outsourcing: activities are no longer carried out by one ‘client’, and are now going to be carried out by someone new on their behalf (a ‘contractor’).
- Contractors: where activities are no longer going to be carried out by a contractor on a business’ behalf and will now be taken on by another contractor.
- Insourcing: this is where activities previously carried out by a contractor are taken ‘in house’.
What transfers during TUPE?
If employees are grouped together to pursue an ‘economic activity’, they form an ‘economic entity’. If that entity transfers to a new owner, so do the employees.
This can include a single employee who carries out one unique role, or whole departments.
The new employer (the ‘transferee’) acquires those employees, along with all their contractual rights, obligations and liabilities.
I am undergoing a business transfer. What do I need to do?
Whether you are taking on a business’ employees or transferring your own, the most important thing to consider is consultation and communication. It is your responsibility as an employer to inform your employees of what is going to happen and how they will be affected.
If you are taking on employees, you must consult with the transferor and let them know of any changes you wish to make to the way they work.
Managing a business transfer can be incredibly challenging, and there is a lot to consider. It is worth seeking legal advice from a specialist employment lawyer before undergoing the TUPE process. They can help you manage not only the transfer of business but all the associated aspects such as amending employment contracts and policies, and redundancy procedure.