A Guide To TUPE

What does it mean and when does it apply?

‘TUPE’ stands for the Transfer of Undertakings (Protection of Employment) Regulations and is in place to protect the terms and conditions of an employee’s employment contract when a business is transferred from one business owner to another.

TUPE seeks to ensure that when a company has a new owner – thus a new employer is in place – the employee’s terms and conditions of employment remain unchanged and the employee is treated as having entered into the original contract of employment with the new employer.

Employees have a right to be advised and informed about how the transfer will affect them and the security that TUPE provides for them with regards to their terms of employment.

Examples of when TUPE may apply is if a sole trader sells all or part of his business to a new owner, or where one company is sold or acquired by another. Subject to some exceptions, TUPE applies to employees of businesses and organisations of all types and sizes, from employees of a multi-million international company to a small, family run corner shop. Another example of where TUPE would apply is where two companies no longer continue to exist and join together to form a third ‘new’ company. In this instance, under TUPE, employees would automatically become employees of this new company and their terms and conditions of employment would be protected and should remain unchanged unless discussed and agreed. In a case where goods and/or services are being supplied, TUPE would apply if the circumstances of the transfer amount to the transfer of a business or undertaking to a new employer.

In some circumstances the regulations of TUPE do not apply. These circumstances include transfers by share take-overs (as when a company’s shares are sold to new shareholders, the actual business is not being transferred and the employer therefore remains unchanged), transfers of assets only, transfer of a contract to provide goods or services where this does not involve the transfer of all or part of the business, and transfers outside of the UK.

TUPE offers protection to employees and as soon as employee representatives become aware of a possible transfer they must make thorough investigations as to whether the TUPE regulations will apply in the particular circumstances to offer protection to the employee’s terms and conditions of employment.

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