The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) protect employees from being dismissed or having their contracts changed when a business is sold or purchased or where a service is being outsourced or brought in-house (a ‘service provision change’).
If you intend to expand your business by purchasing or merging with another business, decide to outsource some elements of your business or bring particular parts of your business back in-house or even sell your business, it is likely to trigger specific employee protections and employer obligations under TUPE. It may also be relevant if you are tendering for contracts depending on the nature of the contracts involved.
As an employer, you have various obligations to your employees when involved in a TUPE arrangement:
At the heart of the protection under TUPE is the concept that a dismissal is automatically unfair if the principal reason for it is the transfer of the ownership of the business or a service provision change.
The intention under TUPE is that anyone previously employed by a business before the transfer will automatically transfer across to the new owner with the business, on their existing employment terms, and if the employees are dismissed simply because the new owner does not want to take them on, they will be able to make a claim against the new owner on the grounds that they have been unfairly dismissed. There are also obligations on the seller of a business to keep their employees informed about the sale and, in some cases, consulting with them on any envisaged changes. The penalties for failing to comply with TUPE are particularly costly.
TUPE is a notoriously complex area of employment law and legal advice should always be sought if you have any questions about it and its effect on your business.
At Thorntons, our employment lawyers can support you to manage expansion and reorganisation by giving you and your managers the tools you need to properly manage TUPE processes. We have extensive experience in advising employers of all sizes and from an extensive range of sectors on potential TUPE transfers with minimal effect to employee morale and reputation. Taking advice at an early stage can help you to avoid making costly mistakes which could result in claims in the Employment Tribunal.
We can also provide tailored training to equip you and your managers with the skills and knowledge to grow and reorganise your business as and when it is needed.
In most employment situations taking legal advice early on can often stop the situation from escalating and will save you time and money later. With our proactive and commercial advice, Thorntons Employment Law team can help find the right solution for you in relation to TUPE issues. Give one of our team a call on 03330 430 350 , or complete our online enquiry form and we will contact you.
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