If you're directly affected by TUPE we can help you understand your legal rights and help you to defend them.
TUPE is a complex Employment law subject and it's easy to misunderstand how it can affect you at work if you've informed that TUPE is going to affect you.
What is TUPE?
TUPE is a legal framework designed to protect your salary, benefits and working conditions if the business you work for is sold.
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) is law created in Europe but which has since been enacted as being made law in its own right in Great Britain. The aim of TUPE is to protect employees’ rights on either the sale of a business (Limb A) or to protect employee rights when there is a service provision change (Limb B).
TUPE has three legal requirements in UK employment law:-
- The automatic transfer principal. This means that employees transfer to the buyer of a business who takes on all rights, liabilities and obligations which the employee had with the seller of the business.
- Employees are protected against dismissal in connection with TUPE.
- There is an obligation on the seller of the business and in some cases on the buyer to inform and consult with the representatives of the affected employees.
TUPE applies where there is a “relevant transfer” and this requires three elements:-
- there to be an economic entity (ie. a business)
- a transfer of that economic entity; and
- the economic entity retaining its identity following the transfer, for example, if a mini supermarket is sold and at the time of the sale, there are 10 employees who all work in the business, then on the transfer of the business, those 10 employee(the affected employees) would transfer to the buyer of the business. In some circumstances, the buyer may be intending to run the business themselves or to use, say, family members to work in the business. In those circumstances, there may be a redundancy situation and the buyer (the transferee) may be able to rely on an “economic, technical or organisational” (“ETO”) reason for there being a redundancy situation.
An example of a Limb B TUPE transfer is where a client engages an outside contractor, ie. a cleaning company to carry out the cleaning at a business. A service provision change would occur when the client, (the business), decided to change the cleaning contractor but noting that except in some circumstances where there is an associated sale of a property, the cleaners employed by the outgoing cleaning contractor would by operation of TUPE transfer to the incoming cleaning contractor.
Objecting to the transfer
Employees also have the right to object to the transfer, in such cases, their employment ends without there being a dismissal and with no compensation payable in those circumstances.
Protection against dismissal
TUPE provides increased protection against dismissal which is more than normal unfair dismissal rights for employees who have the qualifying length of continuity of service. Dismissals will be automatically unfair if the sole or principal reason for the dismissal is the transfer itself. If however the reason is an ETO reason, then depending on the facts, this instead may be fair or unfair.
If an employee believes that either before, on or following the transfer and in connection with the transfer, either the seller or buyer substantially changes the working conditions to the employees’ material detriment, these are treated as dismissals and there is increased protection against dismissal (Reg. 4 (9) and 4 (11). This is in addition to normal constructive unfair dismissal.
Insolvent businesses in a TUPE situation
There is protection for employees rights in that some payments due on a transfer of an insolvent business can be claimed by the employer from the redundancy payments office (RPO).
If your employer is planning on either selling the business you work in or buying a business and new employees are coming in and you may be affected, call us on 0161 785 3500 for advice on your rights.