Legal Requirements of TUPE

There are several legal requirements of a TUPE that you must know in order to make a legal transfer. These apply to all businesses in the UK, regardless of their size. You must follow this legislation; however, if you transfer a business via a share sale, then you do not require a TUPE. If your employee does not want to work for the new employer, they are entitled to resign without notice before the transfer is completed. However, you cannot fire employees or make them redundant after a TUPE transfer. Your employee can reject the transfer or claim unfair dismissal if the working conditions under the new employer are considerably worse.

This guide will outline the core requirements and the steps you will need to take to fulfil them. Depending on the kind of business you run, there may be other requirements to consider; however, this guide will address what is essential to a TUPE.

What is TUPE?

The two conditions that need to be met for a TUPE transfer are:

• your business is changing hands and your staff will be working under a new employer;
• there is a service provision change.

You must inform your employee’s representatives or trade union of the changes that will come into play through the transfer. This includes any structural reorganisation. If your business employs fewer than ten people and does not have representatives or a trade union, then you should consult them directly.

The following information should be provided to the employee’s representatives:

• your employee’s identity, including age;
• their employment contract information;
• collective agreement information;
• disciplinary action information;
• information on formal grievances made by employees;
• information about any previous or pending legal action against you.

According to TUPE UK law, you can be penalised if you do not complete this stage.

When your business is changing hands

In this case, your business is being transferred from one owner to a new owner, who then becomes the new employer of your staff. This also applies when a business is undergoing a merger, such as when two businesses both close in order to form a new one.

When there is a service provision change

A service provision change usually involves a new contractor; in-house services such as catering are transferred to a new contractor. This also involves when a contract ends and is transferred to a new contractor, or is transferred in-house by a previous customer.

Service provision changes are relevant for employee groups such as:

• security staff;
• catering team;
• cleaning staff.

There is a service provision change if:

• the service and related activities provided by the new buyer are the same;
• the service was carried out by an organised grouping that performs what is required on behalf of the client;
• the client is the same under the new buyer.

What does meeting the conditions of a TUPE mean for you?

You may find that both of the above conditions apply to your TUPE transfer at the same time, or that only one condition is met. In both situations, you must still follow the legal requirements necessary for this change.

These include:

• ensuring that all employees who were employed before your transfer retain their job under the new buyer;
• the terms and conditions of your employees’ work will not change in connection with the transfer under the new buyer;
• if employees are dismissed and it is proven to be in connection with the transfer, then they can appeal for unfair dismissal;
• all employees implicated in the transfer will be consulted first by you and the new buyer.

Your new buyer must accept the following responsibilities in a transfer:

• your employee’s terms and conditions of their employment;
• preservation of the employee’s original start date, so they are deemed to have been in continuous employment;
• any currently agreed payments such as redundancy, holiday pay or sick pay;
• any currently agreed arrears of payments such as redundancy, holiday pay or sick pay;
• liabilities such as unfair dismissal;
• collective agreement terms that are part of the employee’s contract with you;
• non-employment employer liabilities such as tort or civil wrong including loss or harm such as personal injury.

All statutory and contractual rights of the employee are passed from you to the new buyer. This will also include any liabilities that you are responsible for, such as claims made for discrimination or unfair dismissal. According to pension legislation rather than TUPE law, the new employer has to provide a minimum level of pension provision. Inform the new employer about any pension rights that your employees currently have.

How to decide which staff will be transferred under TUPE

You will have to decide which core members of staff will be transferred to the new employer.

Conditions for a business transfer may include considerations such as:

• whether the employee is on a fixed-term contract;
• whether they are on short-term leave or parental leave.

TUPE makes sure that the terms and conditions of your employee’s contract do not change when your business is transferred to a new buyer and employer. It is important to take stock of TUPE law, as failure to properly address the transfer of your employee’s rights can be penalised. Depending on the nature of your transfer, this can be a relatively straightforward process, but you will need to consider whether your employees meet the conditions of a TUPE transfer carefully. Make sure that you consult your employees and HR team about the transfer. You may need to work with your HR team to decide which members of staff are considered dedicated and will be part of the transfer.