If you are considering changing contractors, taking a service in-house, merging with or buying another business, TUPE may apply to you…

TUPE

If you are considering changing contractors, taking a service in-house, merging with or buying another business, TUPE may apply to you.

TUPE is one of the areas in HR where you absolutely must get specific advice for your business. It’s complex, and it’s too easy to make costly mistakes.

You will need to take into consideration that you could inherit staff you don’t know, with all the challenges and costs associated.

What is TUPE?

TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations 2006. These regulations are most likely to apply when a business is sold, or when it merges with another company.

TUPE can also apply when you change a service provider (this means your company stops using one contractor and transfers your business to another, who provides the same service), or you take a service in-house that you previously outsourced; for example your office cleaning.

What are the requirements of TUPE?

TUPE exists to protect workers during mergers, acquisitions and transference of contracts. It means if you buy a business, or you move a contract, you may find yourself obliged to retain employees and bring them onto your payroll, or transfer their employment to your new contractor.

In this situation, the requirement of TUPE is that you must maintain the employee’s existing contract, terms and conditions, and carry over their length of service.

If you are receiving the employees from another company, you also need to be aware that TUPE means you will be responsible for any outstanding claims for discrimination, unfair dismissal or equal pay.

You should discover this when you are carrying out due diligence prior to purchase or merger, so make sure you check your situation.

You must go through a period of consultation with staff. If you fail to do this there is a financial penalty of up to 13 weeks pay per employee, payable by both transferor and transferee.

Reality HR approach

The key to making this successful is both planning and good communication.

The initial step we take with you is to ascertain if TUPE applies in your situation.

We always liaise with an employment lawyer on your behalf, as it’s such a complex subject.

Once we know TUPE applies, we get involved in the pre due diligence stage to ensure you have all the relevant new employee information you require.

If your employment lawyer handles this part, you can incur unnecessary costs.

We hand the matter back to the employment lawyer when his or her knowledge, skills and professional qualifications are essential to you.

This approach potentially saves you significant sums of money.

Read our Case Studies

If you want to know if TUPE applies to a current or planned situation, please contact us for specific advice on 01256 328 428.

 

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