Answers to Common TUPE Questions
Below are answers to some of the most common TUPE questions. If you are being TUPEd and have concerns give us a call. Read more...
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What is “TUPE”?
“TUPE” is a law that governs the transfer of employees when businesses are transferred or service providers change. The purpose of TUPE is to ensure that employees are protected when this happens.
The full name of the law is the Transfer of Undertakings (Protection of Employment) Regulations 2006.
What rights do employees have in a TUPE transfer?
Employees transfer automatically together with most of the rights and obligations in their contracts of employment; this is the “automatic transfer principle”.
Any changes to employees’ existing terms of employment are void unless the employer can show that there is an economic, technical or organisational reason entailing changes in the workforce (“ETO reason”).
Further, an employee who is dismissed as a result of the transfer itself or a reason connected with the transfer that is not an ETO reason will be considered to have been automatically unfairly dismissed (provided they have been employed long enough to be able to bring a claim).
How does TUPE affect my pension rights?
Occupational pension scheme rights that relate to old age, invalidity or survivors (typically final salary schemes) do not transfer under TUPE.
Any provisions of an occupational pension scheme which do not relate to benefits for old age, invalidity or survivors are not treated as being part of the scheme and, as such, do transfer under TUPE.
Other pension rights, such as a contractual right to receive a percentage of salary paid into a personal pension scheme, will transfer under TUPE.
I am being TUPE transferred to a new employer without any consultation. Is this lawful?
An employer has a duty to inform appropriate representatives of all affected employees of certain information about the transfer.
Appropriate representatives are Trade Union reps (if a Trade Union is recognised) or representatives appointed or elected for purposes of consultation.
In addition, if the employer envisages that “measures” will be taken in relation to affected employees, there is also an obligation to consult. Measures are changes that will be made as a result of the transfer, such as changes to terms and conditions of employment, relocating the business or changes to working conditions.
Consultation should begin as early as possible, although there is no set timeframe in TUPE. There should be given sufficient time for consultation to be completed before the transfer.
If an employer fails to inform and/or consult in relation to a TUPE transfer a claim may be brought for up to 13 weeks’ pay per employee. The claim would need to be brought within three months of the date of the transfer.
I do not want to be taken over by another company; can I refuse and take redundancy instead?
An employee has the right to object to the transfer and this has the effect of terminating their employment. However, that termination would in most circumstances be taken to be a resignation by the employee.
An objection is not treated as a dismissal unless the transfer would involve a substantial and detrimental change to their working conditions. In those circumstances it may amount to constructive unfair dismissal.
There is no right to take redundancy in this situation.
Some of the staff in my department are being TUPE transferred to a new company but I am being made redundant. Can my employer do this?
Your employer would have to show that the reason for making you redundant is not connected to the TUPE transfer or is for an economic, technical or organisational reason that requires changes to the workforce. This is known as an “ETO reason”. Your employer has to use its own ETO reason; it cannot use the new company’s reason to justify the redundancy.
Your employer would also need to follow a fair redundancy procedure to show that you were dismissed fairly.
My employer’s business is being sold. The purchaser has said that they won’t have my role in the new organisation. Should I be made redundant?
If your current employer seeks to make you redundant on the basis of the purchaser not needing you in their business, that is likely to be unfair.
If your role does not exist in the new company, then the new company could make you redundant. It would have to follow a fair process when making your position redundant, which it could only do once you have transferred over to it.
If the new company fails to consult with you prior to your redundancy or fails to search for any suitable alternative positions within the new company, you may have an unfair dismissal claim against the company.
If you have worked for your employer for two years or more, you would be entitled to a statutory redundancy payment.
Can my new employer change my salary, holiday entitlement or working hours after a TUPE transfer?
Your new employer can agree changes to the terms and conditions of your employment with you if they are either positive, not connected with your transfer of employment, or are connected with your transfer but are necessary for an economical, technical or organisational reason. These changes need to be agreed with you.
However, if the changes to the terms of your employment are detrimental, connected with your TUPE transfer itself, or for a reason connected with the transfer which is not an economical, technical or organisational reason, then they are void even if you agree to them.
Changes might still be connected with the TUPE transfer even some time after the transfer takes place.
Is there a minimum time after a TUPE transfer before my new employer can make me redundant?
There is no minimum time limit placed on your new employer preventing them from making you redundant after a TUPE transfer, so long as the redundancy itself is fair and genuine.
Is there a minimum time after a TUPE transfer before my new employer can change my contract?
There is no time limit on when your new employer can change the terms and conditions of your contract of employment by agreement with you. However, even if you agree to any changes with the new employer, if they are connected with the TUPE transfer then they may be void.
Following a TUPE transfer, many employers wish to harmonise the contracts of the employees they take on with the contracts of their existing employees. However, if the only reason for this is to bring the transferred employees’ terms into line with existing employees, this is likely to be connected with the TUPE transfer even if made some time (even years) after the transfer. As such, changes might be void even if they are agreed.
I am being TUPE’d to a new employer shortly before I am due to start maternity leave. Does my new employer have to honour my contractual maternity pay?
The new employer must honour your contractual maternity pay as almost the whole of an employee’s contract of employment will transfer under TUPE. Anything that would have been honoured by your old employer immediately before the transfer must therefore be honoured by your new employer.
The new employer effectively steps into the shoes of your old employer; therefore the new employer will have to pay your contractual maternity pay in line with the terms specified in your original contract of employment.
I am being TUPE transferred to a company 50 miles away and don’t want to travel. Should I be made redundant?
If your employer ceases or is intending to cease carrying out work in the place where you were employed this will give rise to a redundancy situation.
However, as you are being TUPE transferred to another company, one that is 50 miles away, this may constitute a ‘substantial change in working conditions to your material detriment’ and therefore it may be possible treat the contract of employment as having been terminated by reason of constructive dismissal.
Travelling a distance of 50 miles may constitute a substantially detrimental change in your working conditions and therefore may give rise to a claim clam for unfair dismissal.
My employer is making me redundant before he sells the business. Am I covered by TUPE?
The reason for your dismissal must relate to the future conduct of the business and it is not fair to dismiss employees merely to obtain a higher price for the business. Your employer can therefore not make you redundant purely because the purchaser of the business (your potential new employer) does not require you to work for them. Your employer can only rely on a reason of its own and not a reason of the new employer.
Redundancy is an example of an “ETO” reason, which is an economic, technical or organisational reason that requires changes in the workforce. If the dismissal is due to redundancy, which may be classified as an ETO reason entailing a change in the workforce, then liability for your dismissal (redundancy) will lie with your employer. If your employer cannot show that the redundancy was fair or that they acted reasonably, you may have a claim for unfair dismissal.
Where you are dismissed prior to the transfer but in connection with the transfer and no ETO reason can be established, liability for an unfair dismissal claim will pass to the new employer under TUPE.
As it is sometimes unclear whether or not TUPE will apply and who is responsible for making a redundancy payment, employees are best advised to consider making claims against both employers.
The contract on which I work is being taken in-house by my employer’s client. Am I covered by TUPE?
If a contract on which you are working is being taken in-house by your employer’s client you will be covered by TUPE, providing you are part of an organised grouping of employees providing a service, still employed by your employer and assigned to the contract immediately before the transfer takes place.
For TUPE to apply a ‘relevant transfer’ must take place and this can include what is known as a ‘service provision change’. A client taking the same work (the work in which you are employed to do) in-house, this is likely to be a service provision change and therefore covered by TUPE.
There are two exceptions to the application of TUPE and these are if the contract is for the supply of goods for the client’s use, or if the activity (the work) that you have been carrying out is in connection with a single specific event, such as a “one off” job.