TUPE is the abbreviation used for the Transfer of Undertakings (Protection of Employment) Regulations. This becomes relevant for any of the redundancy decisions when an entire business or a portion of the company is transferred to another owner.
Both the old and the new owner need to consult and inform staff that will be affected indirectly or directly by the transfer of ownership.
The rights of the employees are protected when a company changes hands. In addition, Terms and Conditions are also maintained when part of or the entire business transfers to another owner.
The TUPE regulations passed first in the year 1981 and were amended in the year 2006 and the year 2014, with the aim of safeguarding and protecting the rights of employees when the business that employed them decides to change hands.
Under the initial common-law position, a relationship between an employee and employer is personal as well as defined or set out in the employment contract.
If this business changes ownership or hands, the initial common-law position meant the termination of an original employee-employer relationship. This meant that the contractual rights of an employee ended when the ownership of the business changed.
In contrast, TUPE regulations are in place to protect the employee’s contractual employment rights, when a business is transferred or sold.
This now means employees cannot be let go or dismissed or their contracts varied or terminated, just because the business is sold or transferred. If you have questions regarding TUPE, then you can reach out to one of our qualified solicitors for advice.
TUPE regulations provide a framework which is associated with the protection of employee rights.
What Employee Rights Does TUPE Protect?
A TUPE transfer will mean that a new employer steps effectively into the role of an old employer, which means original contracts associated with employment stay the same before the actual transfer. This includes pension arrangements, annual salaries, place and hours of work, holiday entitlements etc, stay the same.
This does not necessarily mean that the conditions of the employee’s employment will not be changed after or before the transfer. Employment dismissals or conditions can only be changed for what is known as ETO ( Economic, Technical or Organisational) reasons, which require that changes need to be made to a workforce, but not due to the actual transfer.
If an employee decides that they would prefer not to continue working for the new owner of the business, the employees have a right to terminate the contract.
In these cases, the employment contract would come to an end on the transfer of the business. In these cases, employees are usually not entitled to notice or redundancy payments.
Disclaimer: The contents of this article are for information purposes only and should not be relied upon as formal legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Specific legal advice should be sort tailored to the individual circumstances in all cases.
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