TUPE stands for Transfer of Undertaking Protection of Employment Rights; it is the law that protects employees and their benefits when their employment changes hands. But what is the correct process to follow?

The regulations govern the transfer, and it applies to two relevant transfers:

• Business takeovers for example when a business or part of business is transferred from one employer to another.
• Service provision changes such as outsourcing or insourcing a new contractor. 

The legislation is complex, and it is riskier if you have not fulfilled your obligations as an employer. If an employer fails to comply with TUPE requirements this can result in a financial penalty, which can be 13 weeks pay for each affected employee. Employees rights are protected if they are classed as an employee and the part of the organisation that’s transferring is in the UK. 

What Process Should You Follow? 

TUPE can be different from one company to another however the process below typically applies:

• The old and new employers identify who is affected by the transfer
• The old and new employers inform, and in some cases consult, employees who are affected by the transfer
• The old employer provides the new employer with information about the employees who are transferring, for example their age and identity
• The employees who are transferring transfer to the new employer along with their employment contracts and length of service

When to Inform and Consult

Employers must inform staff representatives (recognised trade union or, if there are none, appropriate employee representatives) about the transfer — this is where the old employer will tell employees about the facts of the transfer. Employees must receive this information before the transfer. In some cases, the old employer must consult with staff representatives on any changes they are proposing to make, that will affect employees. This process is a chance for the old employer to explain the changes planned, why the transfer is happening and consider feedback on the changes to working practices that the transfer will bring, before making a decision.

The consultation should not discuss the fact that the transfer is happening, it can include changes such as:

• location of work
• date of pay
• hours of work

Notice Period 

Employees should be informed in advance about a TUPE transfer but there is no set length of time for this notice. The employment contract is not coming to an end which means the old employer does not need to give the same notice period as they would in other circumstances such as a dismissal.

The Day of Transfer 

On the date of the transfer, employees will automatically transfer to the new employer, along with their length of service ('period of continuous employment') and employment contract, including their terms and conditions of employment. This means an employee's start date is the same as it was before the transfer and they do not get a new employment contract, it just continues. The new employer must inform the transferred employees in writing that there's been a change of employer.

On the date of the transfer, the new employer becomes responsible for:

• any outstanding wages or unpaid bonuses
• any outstanding holiday
• any arrangements to carry over holiday from previous leave years or 'enhanced' holiday (if employees get more than the legal minimum)

The new employer is still liable for any outstanding holiday and pay even if they are unaware of these entitlements.

It’s not uncommon for problems to arise after a transfer, especially if the old employer has had to make redundancies or there are significant changes to the organisation.

At FPM, we can help you through the entire TUPE process from start to finish, if you are a member, please contact the confidential HR helpline where we can offer any assistance you need.