TUPE stands for Transfer Of Undertakings (Protection of Employment) and are the rules that apply in order to protect employees’ rights when the company they work for merges or is taken over by another organisation, which in turn becomes their new employer. If the terms and conditions of your employment contract are not upheld, you could be entitled to make a claim for compensation. Our expert team of employment solicitors have successfully represented clients in a large variety of cases.
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‘TUPE’ stands for the Transfer of Undertakings (Protection of Employment) Regulations 2006. It is an intricate area of law, but the significance of the Regulations cannot be understated.
Claims arising out of a TUPE transfer can be complicated, but an employer’s failure to adhere to the provisions of the TUPE Regulations can give rise to various employment claims, including unfair dismissal.
Perhaps the primary importance of the TUPE Regulations is that, if there is a valid transfer of employment, then an employment contract between the initial employer and the employee will transfer to the ‘new employer’. This means that there is no termination of the employment contract.
If there has not been a valid Transfer of Undertakings (TUPE) transfer, then you may still have a claim, such as unfair dismissal.
If there has been an effective TUPE transfer, then you may have a claim if:
- The ‘new employer’ tries to vary your contract;
- If the ‘new employer’ tries to dismiss you because of the transfer itself, or for a reason related to the transfer (and you have more than 2 year’s service with the ‘old employer’);
- If you resign because of constructive dismissal or detrimental working conditions;
- If the employer does not inform and/or consult with you appropriately about the transfer.
Strict time limits apply to employment claims and claims must be pursued within three months (less one day) of the end of the employment, or the act being complained of.
These claims should be pursued in the Employment Tribunal, and therefore, they should be initially registered with ACAS under the Early Conciliation scheme. Michael Lewin Solicitors can assist you with this. We are experts in Employment Tribunal claims, and usually offer a No Win, No Fee Agreement (otherwise known as a Damages-based Agreement). We can also offer insurance products to insure you against the risk of paying the Tribunal fees in the event that your claim is not successful.
If you are an Employer looking for advice on TUPE and how to manage the transfer of business as smoothly as possible, visit our commercial employment services page.
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Consultation and the Duty to Inform
Employers (‘new’ and ‘old’) have a duty to inform and, if necessary, consult with, relevant employee representatives regarding a TUPE transfer. The representatives can be either trade union representatives, or elected representatives. If the latter, then the employer has certain obligations to ensure that the elections are fair. The representatives have access to the affected employees, and they have the right to paid leave to train for, and carry out, their duties.
Employers must inform all employees who are likely to be affected by the transfer about the transfer. Such information should include the following:
- That a transfer is intended;
- When the transfer is likely to take place;
- Reasons for the transfer;
- Legal, social and economic implications of the transfer;
- Details of any ‘measures’ (changes to existing working practices or conditions) that the employers intend to take.
If the employer intends to take ‘measures’ that may affect the employees, then the duty to consult arises in respect of these ‘measures’.
The employers may have a defence to a claim that they have failed to inform/consult properly if they can show that there were special circumstances that made it impractical.
If there has been failure to inform/consult properly, then employees can complain to the Employment Tribunal. The Tribunal can award a maximum of 13 weeks’ gross pay to each of the affected employees. It will consider several factors, such as the severity of the breach, or whether the failure was deliberate when considering whether to award the maximum award or a lesser award.
Objection to Transfer
Employees have the right to object to a TUPE transfer. However, if they do, the employment terminates on the transfer date. As there is no dismissal, there would be no entitlement to claim compensation if a TUPE transfer is objected to.
Most rights, obligations, and duties pass from the ‘old employer’ to the ‘new employer’ upon the transfer. (The most important exception to this is pension rights.) This means that, if the employee has not objected to the transfer, the employment contract remains in place and the ‘new employer’ becomes responsible for the ‘old employer’s’ liabilities. There are some exceptions but, generally, if contractual changes are put in place because of the transfer, the changes are likely to be void, as contracts cannot be changed. This is the case even if the employee initially agrees to the changes to their contract.
Employees will automatically be protected from dismissal if the main reason for the dismissal is related to the transfer, and they have more than two years’ service with their employer.
This provides protection for the following:
- employees employed by the ‘old employer’ and dismissed before the TUPE transfer takes place;
- employees who are employed by the ‘old employer’ who did not transfer, but were then dismissed;
- employees who were transferred to work for the ‘new employer’, and were then dismissed;
- employees who worked for the ‘new employer’ and were dismissed because of their employer taking on employees through a TUPE transfer from another employer;
- employees who are ‘deemed dismissed’ because the employer’s repudiatory breach leads to constructive dismissal;
- employees who suffer a ‘substantial change’ in their working conditions to their ‘material detriment’.
If the reason for the dismissal is linked to the transfer, instead of the main reason for it, the employer may have an Economic, Technical or Organisational (ETO) Defence. This will depend on the facts.
TUPE law is extremely complicated and expert advice is required. Please contact us straight away if you feel that you may have a claim. Employment claims have extremely short time limits and must usually be registered under the Early Conciliation scheme with ACAS within three months (less one day) of the end of the employment, or the act being complained of. If a claim is not submitted within this time period, then it will be out of time.