The Transfer of Undertakings (Protection of Employment) came into place to safeguard employees’ jobs should a business or contract be transferred from one supplier to another. This could happen due to a merger, when all or part of a business is sold or when a major contract moves between providers. Failure to meet the demands of any aspect of TUPE law can leave your business open to expensive and time-consuming tribunal claims. Under TUPE law, the contracts of employees must be transferred in total. This means all their terms and conditions of employment have to remain the same, from pensions to holiday entitlement and everything in-between.
Where an employee’s employment has transferred to a new employer under TUPE, the employer will be able to make contractual changes if it has an ETO reason for doing so. However, changes imposed simply because the employer wishes to harmonise terms and conditions between two groups of employees will not be valid. TUPE is not an optional piece of legislation and no organisation is able to decide to opt out of it. However, the simplest way to avoid TUPE is to transfer a business by the sale of a company’s shares, a ‘share sale’. In this situation the identity of the employer does not change. Therefore, the same company continues to be the employer and TUPE will not apply.
HR Professional step by step guidance through TUPE process
Whether your company is large or small, it’s your responsibility as an employer to consult with employees, offering TUPE advice and guidance along with written notice on affected staff and their contracts. If your business is affected in this way, it’s essential you receive HR professional support and guidance to help you through the process step-by-step.