Employment law is an extensive field with a set of regulations that helps employers understand their responsibilities and employees. Transfer of Undertakings Protection of Employment (TUPE) falls under employment law. It mainly protects employees when a company’s ownership changes.
Sometimes when a company changes ownership, employees can move to the new employer with their benefits and liabilities. The new company can take in all employees or some of them under TUPE laws. If an employer isn’t knowledgeable, an HR consultant will assist in determining who is to move and who is not.
Situations Where TUPE Applies
TUPE law is intricate, and it’s easy to get it wrong. The law is riskier for employers who have unfulfilled obligations. Suppose an employer doesn’t comply with TUPE legislations, it can lead to hefty penalties totaling the 13-week wages of every affected employee. TUPE law applies in these situations.
- Business Takeover – When a business is partially or wholly transferred from one employer to another.
- Service Provision changes – Outsourcing, insourcing, or assigning tasks to a new contractor.
What Does TUPE Transfer Regulations Cover?
Companies changing hands is not new, and the TUPE regulations ensure that employees are covered daily in case of a transfer. The law is present to ensure that workers who get transferred to a new employer enjoy the same terms and conditions as with the previous employer.
TUPE regulations affect all businesses in the UK. The initial concern of employees is the continuity of service, whether in a small or an established company. Here are the transfers covered under TUPE operation law.
- After the sale or transfer of a business
- When a company acquires the assets of another business, not the assets or shares.
- The disbanding of two companies to make another
- Goods, services, or contract transfers amounting to the business worth.
TUPE regulations don’t cover short-term contracted employees. For instance, a contractor for cleaning or catering services in a single event. Here are the business transfers not covered under TUPE:
- A transfer of assets only
- Business transfers beyond the UK borders
- Transfers of contracts or services, but there’s no transfer of the business or part of it.
- Selling of a company’s shares to new shareholders, but no transfer of business.
Since TUPE laws are complex and you don’t want to mess up and dig deeper into your pocket as an employer, take a TUPE course. From the course, you learn your responsibilities as an employer.
The TUPE Law Process
During a transfer, there are many things to consider in the TUPE process, which might be confusing. Depending on the nature of your business, your health and safety consultant will help you determine if there are any liabilities with your employees. Here are the stages of the TUPE law process.
- Stage 1 – Consult with the union, employee representatives, and anyone affected by a transfer. Inform them that the transfer is happening, and explain why and when. Let them know how the transfer will impact them and the changes that will occur.
- Stage 2 – Provide all employee details, including age, employment terms & conditions, entitlements, and pension rights.
- Stage 3 – As the outgoing employer, identify how the transfer affects your employees by engaging them and addressing any concerns.
The Bottom Line
Problems can arise after a business transfer, especially if some employees are served with redundancies. Further, significant changes to an organization can fuel concerns. However, your HR department can help you with the TUPE process to ensure a smooth transition.
