TUPE Regulations: When the business you work for changes ownership

Caragh Bailey
28/12/2020
67
8 min read
TUPE regulations by Employment Law Friend

What is TUPE and when does it apply?

When a business changes hands, or changes their service provider, there are lots of things to consider. For you, the employee, there can be lots of worries about your job security. So TUPE regulationsTransfer of Undertakings (Protection of Employment) are there to make sure your employer properly communicates with you what is happening, why it is happening, and how it could affect you. TUPE regulations do not apply to every situation, but if they do apply to yours, your new employer must take on your contract. You keep your terms and conditions of employment and continuity of service (employment) - This is important in keeping your employee rights, as some do not apply with less than two years of continuous service -  However, you could still lose your job through redundancy, or if the business is insolvent.

Insolvency
  • Insolvency is when the business has no money to operate.
  • You are unlikely to be protected by TUPE regulations if the business is closing down.
  • However, TUPE regulations normally do apply if the business is being taken over and transferred.
  • You can claim for any money that your employer owes you, whether you are protected by TUPE regulations or not. If you are protected, the government will pay a certain amount from the National Insurance fund. Then, your employer must pay you any amount left over.

TUPE regulations apply to employees of businesses in the UK. If your part of the business is based in the UK, you are covered, even if the Head Office is not.

Business transfers and Service provision changes are covered by TUPE regulations.
  • Transfers within the private sector
  • Transfers from the public into the private sector

Business transfers are when a business (or part of one) is handed over to a new owner. In order to be protected by TUPE regulations, the identity of the employer must change. This means that mergers are covered if both businesses close and reopen under a new identity. But, if one business buys and absorbs the other, only the employees of the bought business are protected.

Service provision changes are when a service contract changes hands. Certain contracts are not covered by TUPE regulations :
  • a service previously provided in-house is awarded to a contractor (contracting out)
  • a service provided by a contractor is brought in-house instead (contracting in)
  • a contract ends and is re-tendered to a new contractor
  • Only the employees who provide the service which is being transferred are protected by TUPE law
  • the contract is for the supply of goods for the company’s use
  • the contract is for a single event or a short term task

What are the rules around TUPE?

Regulation 13 TUPE: States that appropriate representatives of you, the affected employees, must be given certain information.
If there are fewer than 10 employees working for your employer, that may consult with you directly, without representatives.

Your employer must properly inform your trade union or, if there is no union representatives in the workplace, the elected employee representatives, about anything that would affect you as employees:
  • That there is a transfer happening
  • When the transfer will happen
  • Why the transfer is happening
  • How the transfer will affect you
  • Whether there will be any reorganisation or redundancies
  • How many agency workers they’ll be using and for what types of work

Before the election your employer should:
During the election they should:
  • Ensure a fair election
  • Decide how many representatives are required for the amount of employees affected by the transfer
  • Decide whether the employees would be better represented in groups, or as a whole workforce
  • Decide how long the representatives need to be in place
  • Only allow candidates for election who are affected by the transfer
  • Make sure no affected employee is excluded from the election
  • Allow all employees affected, at the time of the election, to vote
  • Allow each employee the same number of votes as there are positions to be filled
  • Keep voting secret, if possible
  • Ensure votes are counted accurately
  • Honour all elected representatives with the same rights as trade union representatives

What does TUPE mean for employees?

If you don’t want to work for the new employer, you can resign, but you won’t be able to claim unfair dismissal (unless your working conditions are significantly worse off), or redundancy pay. The normal notice period is not required. You must notify either employer, and your employment will end at the time of the transfer.

What are my rights under TUPE?

Your new employer takes over your employment. If they do not meet the their responsibilities, they are in breach of contract.They are responsible for:
  • Meeting all the previous terms and conditions of your contract of employment.
  • Any failures of your previous employer to observe your rights. (You could make a claim against the new employer, for a breach of your rights by the previous employer).
  • Honouring your holiday entitlement.
  • Honouring your continuous employment from your start date, as it was before the transfer.
  • Honouring any collective agreements made under the previous employer.

Can my contract be changed on a TUPE?


Before the transfer
After the transfer
  • Your employer can change your contract, with your permission, provided the change is for reasons other than the transfer.
  • Your employer cannot change your contract before the transfer, just to match it to the new employer’s terms and conditions, even if you agree to the change.
  • Your new employer can change your contract, or even dismiss you or make you redundant, if the reason is economic, technical or organisational (ETO) involving changes in the workforce such as redundancies or restructuring. The normal rules around fair dismissals, redundancy & collective redundancy apply.
  • Or; if your contract allows for such a change
  • Or; if you agree to it
  • Your new employer might want to improve the terms of your contract in your favour, but, again, they must have your permission to do so.
  • Your new employer can change your terms and conditions after the transfer, including reducing your pay, if it will prevent job losses. However, they must negotiate these changes with your trade union or employee representatives.
  • However, if the reason they are changing your contract is the transfer itself, they cannot make the change.
  • Collective agreements made before the transfer will still apply afterwards.
  • Collective agreements made after the transfer will not apply if the new employer has not taken part in the process.
  • Your employer can renegotiate the terms of any collective agreement after one year. But only if the terms are not less favourable to you, the employee.
  • Pension rights you have earned up to the time of the transfer are protected by TUPE regulations.
  • Your new employer does not have to continue an identical pension

Make sure you get an up to date written statement of employment, stating that your terms and conditions are unchanged and including your new employers details.
Your old employer is responsible for giving your employment information to your new employer, including any disciplinary & grievance procedures you've had and any legal action you have or may be likely to take against them.

Frequently Asked Questions
TUPE protection lasts indefinitely. However, the more time that has passed since the transfer, the harder you will find it to prove that any changes made to your terms and conditions of employment are as a result of the transfer itself.
Business Transfers: If the business you work for is operating in the UK (i.e. has a building(s), assets, fixtures and fittings, employees), but you spend most of your time working outside of the UK, you are mostly likely protected by TUPE law.

Service Provision Changes: There must be an organised group of employees in England, Scotland or Wales to qualify under TUPE law.

For example: If you're part of a team working on a contract that is performed in the UK, but you work online, from home in another country, it is likely that you are protected. However, if your whole team works from a country outside of the UK, you would not be protected under TUPE regulations.

Has your old or new employer mishandled any part of the transfer?
If TUPE regulations have not been met, if you have been unfairly dismissed or made redundant, if you have been forced to leave your job, or if your contract has been breached in any way, get in contact with us and see how we can help.

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This content is provided free of charge for information purposes only. It does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of our company. For employment law advice please get in contact and speak to your employment law solicitors.
 
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