What is TUPE? And why is it back in focus?

What is TUPE?

The Transfer of Undertakings (Protection of Employment) Regulations 2006 is more commonly referred to as ‘TUPE’.

TUPE transfers can occur in two ways: 

1. Business transfer
   When a business, or part of a business, is transferred from one owner to another.
2. Service provision change
   When a service stops being carried out by one entity and starts being carried out by another.

What is the “automatic transfer principle”?

• The automatic transfer principle means that the contracts of employment of employees assigned to the transferring business (or service) will be transferred from the previous owner/service provider to the new owner/service provider. All liabilities up to the point of transfer will also, generally, transfer to the new owner/service provider.
• Employees can usually retain the same terms and conditions that they had before the transfer.
• The outgoing employer must provide the incoming employer with certain information, called the ‘Employee Liability Information’ before any transfer.

A word of caution for employers

Always inform and consult before a transfer
There is an obligation to inform and consult with employees prior to any TUPE transfer. The fact of the transfer, the reasons for it and any ‘measures’ envisaged in connection with the transfer must be shared. ‘Measures’ include any changes which the new employer proposes to make (for example, redundancies).

Dismissals will be automatically unfair unless for an ‘ETO’ reason
Dismissals by reason of a TUPE transfer will be automatically unfair unless they are for an economic, technical or organisational (‘ETO’) reason, entailing changes in the workforce. Employees must have 2 years’ service in order to bring a claim.

Why is TUPE back?

With the new government focused on growth, mergers and acquisitions will be on the rise and we are likely to be hearing a lot more about TUPE.

Further reading

TUPE Guide – UK Govt

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