What's TUPE All About?
TUPE is like a safety net for workers when another business takes over the company they work for. It makes sure that employees don't just lose their jobs or rights because of this change.
Breaking Down TUPE
TUPE is short for "Transfer of Undertakings (Protection of Employment) Regulations." It's a set of rules from the government that started in 1981 and had some updates in 2006 and 2014. These rules are important and, sometimes, a bit tricky, but they're in place to follow guidelines from the European Union.
Why Should You Care About TUPE?
Day in and day out, loads of businesses change hands, and TUPE safeguards employees' rights during this process. Here are some situations where TUPE comes into play:
- When a company is sold.
- When services like cleaning or security are moved from one provider to another.
- When the lease of a property is transferred, it remains the same type of business.
Understanding TUPE for Your Business
To make sure your business is on the right side of the law, you need to know:
- When TUPE applies.
- What the legal requirements are under TUPE.
- The steps to follow to stick to TUPE rules.
- What happens if TUPE doesn't apply.
- Other ways you can shield your business in relation to TUPE.
When Does TUPE Kick in?
TUPE is relevant when a "business transfer" happens. This means that if a company keeps its identity the same, TUPE likely applies. The law looks at several things, like whether assets, customers, or staff are moved to the new business and how similar the business activities are before and after the transfer.
As this can get quite complex, it's wise to get some legal advice if you think TUPE might be involved in any business changes you're planning. This is especially true for situations involving outsourced services brought in-house or changed between providers.
What Does TUPE Mean in Legal Terms?
With TUPE, employees of the old business become employees of the new company with the same employment terms and conditions. It's as if they've always worked for the new employer. They can choose not to move to the new business, but this decision might affect their legal rights.
If someone's job is terminated because of the transfer, it's typically considered unfair. However, there are some legal exceptions to this. Additionally, new employers can't just change terms and conditions for transferred employees because they feel like it. There are strict rules around this.
For example, suppose Company A loses a contract, and Company B takes over. In that case, Company B also takes on the employees who used to do that work, including any issues like unpaid wages or ongoing claims from those employees.
Who Gets Transferred?
The law has a way of figuring out who should move to the new company based on how involved they were with the relevant tasks or business parts. Recently, courts have said that sometimes, only parts of an employee's job might transfer. Also, there's a broader view about who counts as an "employee" under TUPE.
Sticking to the TUPE Rules
If you're involved in a business change covered by TUPE, you must:
- Tell and discuss with the staff about what's happening.
- Share specific information with employee representatives well before the transfer.
- Consult with the staff about any changes because of the transfer.
If these steps aren't followed, employees might take the matter to an Employment Tribunal, potentially leading to compensation. Small businesses with fewer than ten staff have slightly different rules.
The old employer needs to give the new employer detailed information about the employees who are moving across. This should happen at least 28 days before the transfer.
How to Protect Your Business With TUPE
You can't ignore TUPE, but businesses can agree on who's responsible for what during a transfer. This agreement involves something called "contractual indemnities." It's wise to get legal help with this. Also, you might be able to organise work differently to make TUPE situations clearer or less likely.
TUPE When a Business Is Failing
TUPE has some flexibility if a company is going bust. The new employer might not have to take on certain payments to staff, and there might be more freedom to change employment terms to try and save the business.