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Navigating TUPE

Employment law is often like shifting sands in the desert; nothing stays the same for too long. One area of legislation that is seeing some upcoming movement is TUPE – the Transfer of Undertakings (Protection of Employment) Regulations.

The View HR team have many combined years of TUPE experience, and in this blog we will explain what TUPE is; then we will look at when such legislation applies, consider the upcoming update to the legislation and briefly review points to keep in mind.

Understanding TUPE: What You Need to Know

TUPE safeguards employees’ rights when their employment undergoes a transition due to a business transfer or a service provision change. It ensures that employees retain their terms and conditions, as well as their length of service.

In the case of a business transfer, TUPE applies when either the whole, or part of a business moves from one employer to another.  This may happen because a business has merged.  The triggers for TUPE in this case are where most of the assets have moved from one employer to another and where the activities of the business will remain largely the same after the transfer.  Those assets will include buildings, equipment, copyright, branding, customers, and employees.  TUPE will apply if many of these conditions are met, but may apply even if only one condition is met.

A service provision change can apply in a number of situations – when a contract is being retendered, a service that was outsourced is transferred in-house and when an in-house service is outsourced.  Examples of common TUPE situations in this area include changes in areas such security, catering and office cleaning services.

The TUPE regulations apply regardless of the size of the businesses involved and the number of employees affected but will not usually apply in a situation where shares are being transferred.  TUPE may be applicable in a situation which involves international transfers. 

The July 2024 Update: Direct Consultation with Employees

So, what are the updates? From 1st July 2024, employers are able to directly consult with employees in specific scenarios:

  • when the business has fewer than 50 employees; or,
  • when the proposed transfer involves fewer than 10 employees.

As it currently stands, organisations with 10 or more employees are obligated to arrange an election to select new employee representatives for informing and consulting about a TUPE transfer if there are no existing representatives in place. This process adds to the complexity and burden of statutory obligations imposed on employers during a TUPE transfer. Notably, smaller businesses with fewer than 10 employees, termed as micro-businesses, are exempt from this requirement.

How does this impact your business? Firstly, it means that smaller businesses do not have to go through the same level of consultation which may have been burdensome for some organisations; now less management time and money needs to be devoted to a transfer. Secondly, it provides more flexibility for SMEs; they can decide to directly consult or not. Thirdly, it still means employees’ voice are heard but possibly now even stronger with the removal of an additional layer of communication.

Navigating TUPE: Points to Consider

While TUPE is designed to protect employees, navigating its complexities can be challenging. It’s essential for both old and new employers to understand their obligations and ensure compliance throughout the transfer process.

  • Consultation Process: Careful management of the consultation process is crucial, as failure to consult appropriately could result in substantial payouts. A robust transfer plan should be agreed upon, detailing how consultation will be conducted and when essential information will be provided.
  • Employee Rights: TUPE outlines specific rights for employees, including protections against unfair dismissal and changes to terms and conditions. Employers must adhere to these regulations to avoid potential legal repercussions.
  • Liabilities and Indemnity: The new employer inherits liabilities for claims by employees, including discrimination and equal pay amongst others, necessitating agreements on indemnity against costs. Clear communication and negotiation between old and new employers are vital to mitigate risks effectively.

Seeking Guidance: How View HR Can Help

Given the intricacies of TUPE, seeking expert guidance is advisable, especially if you’re considering a transfer within your business. At View HR, we offer comprehensive support and advice to navigate the TUPE process effectively. Get in touch for an initial consultation to explore how we can assist you.

The upcoming update to TUPE regulations signifies a significant shift in the consultation process, offering more direct engagement with employees in certain circumstances. By understanding and adhering to TUPE requirements, businesses can facilitate smooth transitions while safeguarding the rights of their employees.