Miscellaneous: Transfer of Undertakings (Protection of Employment) (TUPE)
Employee transferred to another employer (TUPE)
Regulation 5 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 and the Transfer of Undertakings (Protection of Employment) Regulations 2006 (The TUPE Regulations) set out how employees’ contracts of employment are effected when ownership of a business or part of a business is transferred.
The TUPE Regulations apply where:
- a business is transferred to a new owner as a going concern
- part of a business which forms “an economic entity which retains its identity” is transferred
- there are “service provision changes”, including where services are outsourced, in sourced or assigned by a client to a new contractor
Where TUPE applies the old employer (the transferor) is obliged to provide information about the transferring employees to the new employer (the transferee) in the form of “employee liability information”. If an employee’s information is not provided, any contract of employment that was held immediately before the transfer will automatically transfer to the new employer.
Employees have no right to prevent or be consulted on the transfer itself.
If the provisions of the TUPE Regulations apply,
Where an employee transfers to a new employer with their employment rights protected by TUPE the new employer will have to take account of earnings with the previous owner.
Any SP already in payment would continue as though the new employer and the old one were one and the same.
Where the previous employer failed to pay some or all of the SP due responsibility for making good any shortfall automatically transfers to the new employer.
Dismissal of employee because of relevant transfer
TUPE provides protection against dismissal connected with the transfer. A dismissal is deemed to be automatically unfair if the sole or principle reason for it is:
- The transfer itself or
- A reason connected with the transfer that is not an economical, technical or organisational reason entailing changes in the workforce.
If an employee considers that they have been dismissed for this reason, advise them to contact Acas.
For further advice contact PT CPP Statutory Payments Technical team BP1101 Benton Park View Newcastle upon Tyne.