Employment Law Solicitors:
When a business changes owner, its employees may be protected under the Transfer of Undertakings (Protection of Employment) regulations (TUPE).
In summary, the TUPE Regulations mean that in these circumstances the Transferee (the incoming employer) effectively steps into the shoes of the Transferor (the outgoing employer) assuming the rights, liabilities, powers and duties of the Transferor.
This means that:
employees employed by the Transferor immediately before the TUPE transfer automatically become employed by the Transferee from the time of transfer on the same terms and conditions of employment;
continuity of employment is maintained;
any dismissal because of the transfer itself is automatically unfair, unless the reason for dismissal is an ‘economic, technical or organisational reason entailing changes in the workforce’.
When Does TUPE Apply?
The TUPE Regulations preserve an employee’s terms and conditions when:
Business transfer; or
Service provision changes
1. Business Transfers
This is when business or undertaking, or part of a business or undertaking, is transferred to a new employer.
In order to determine whether there has been a business transfer, a number of factors are considered, such as: what type of business it is; is there a transfer of assets; is there a transfer of customers; have the majority of staff been taken over.
2. Service provision changes
This is when a new service provider is appointed, whether on the initial contracting out of services (outsourcing), or to replace an existing external provider (second generation outsourcing), or when services are brought back in- house (insourcing).
An Employee’s position
When an undertaking is transferred the position of the employees of the previous or new employers is as follows:
an employee claiming to have been unfairly dismissed because of a transfer has the right to complain to an employment tribunal
transferred employees who find there has been a fundamental change for the worse in their terms and conditions of employment as a result of the transfer generally have the right to terminate their contract and claim unfair dismissal, on the grounds that actions of the employer have forced them to resign.
In both the above cases dismissal because of a relevant transfer will be unfair unless an employer can show there has been an economic, technical or organisational (ETO) reason entailing changes in the workforce.
Even if the dismissal is considered fair, employees may still be entitled to a redundancy payment.
I think I have a claim. What should I do?
Contact us to arrange a free case analysis. TUPE can be a complex area of law and we have a team of specialist employment law solicitors ready to help you.