TUPE Law Solicitors

Under TUPE, all employees will be transferred to the new employer unless they do not wish to transfer. TUPE then states that “all the transferor’s rights, powers, duties, and liabilities under or in connection with the transferring employees’ contracts of employment are transferred to the transferee”. This includes their rights in the employment contract, statutory rights and employment continuity. It also means that an employee can bring a claim against their employer for factors such as unfair dismissal, redundancy, discrimination and unpaid wages.

As TUPE exists to protect employees, employees have the right to transfer to the new employer on exactly the same terms as before, the only exception of which is old age pensions.

The old employer is therefore required to give details of all employee rights and liabilities that will transfer. Therefore, before buying a business, it is imperative that you understand the type of employees you may gain and the current employee terms that exist.

If the only reason for dismissal is because of the business transfer, this will be classed as unfair. However, this will not be the case if the dismissal was for a different economical, technical or organisational reason (ETO) which meant that you had to dismiss some staff. The factors which would come under this are very specific and must include changes to the workforce, such as the size, location or job functions.

However, it is not easy to prove that dismissal was for an ETO reason. For example, if you were to dismiss an employee because of your attempts to change the terms and conditions with employees, this would be invalid as there is no change to the workforce. It could still be the case that, even if a dismissal is protected by an ETO reason, it could be deemed unfair in other ways. This is why it is always best to consult an employment lawyer if you are considering dismissing staff whilst undergoing a business transfer, and it could save you unwanted legal costs later down the line.

The old employer must inform the new employer of the employee liability information. This includes information such as identity, age, disciplinary and grievance records and any claims that they have which could impact the transfer. If this is not complied with, the new employer could claim compensation at the employment tribunal, and depending on how much has been lost, a minimum award of £500 per employee could be granted unless the tribunal agrees to give a smaller amount.

If you as an employer fail to inform employees and representatives appropriately followed by a consultation, an employee could make a complaint to an employment tribunal. If this is successful, the employee can be awarded compensation, which is anything up to 13 weeks’ gross pay per employee affected.

An employer can defend this, however, if it can be proven that there were mitigating circumstances meaning that the regulations could not be adhered to. If you breach any of the TUPE terms, liability for this will usually fall between the old and new employer, and usually, a contract will be drawn which sets out who is responsible.

This is why it is important to ensure that you are following any legal requirements, which we can do, to avoid potential stress and unnecessary payouts.

The new employer is required to take on employees on their previous employment contract. It is illegal to change the terms of this if the ony reason for doing so is the TUPE transfer. However, in 2014, some changes were made to TUPE which allow employers to make changes if:

• The existing employment contracts allows for a change to be applied such as a mobility provision in the contract

OR

• Both the employer and employee agree on the change but the reason has to be related to ETO and not TUPE

This remains hard for employers, as for the reason to be ETO related, there has to be a change to the workforce in some way.

Terms and conditions that have been formed on the basis of collective agreements could be renegotiated after a year, but the terms cannot be any worse for an employee than the existing contract in place.