TUPE, or the Transfer of Undertakings (Protection of Employment), is often extremely confusing for both employers and employees, generating lots of questions from clients.
TUPE is protection regulations for employees when a business changes ownership. Transfer of undertakings apply to the employees of businesses within the UK.
Common TUPE mistakes
To help you steer a steady course through the process, we’ve highlighted some of the common TUPE misconceptions that we encounter. Alternatively, you can take a look at some TUPE myths.
1. If an employee spends 50 per cent of their time on a contract, we can choose whether they transfer or not
It is a common misconception to think that employees will actually split their time 50:50 and that this means TUPE definitely does or does not apply. The percentage of their time is only a starting point. In reality, you need to look at whether those staff were grouped for the purpose of working for that client or on that contract, or is it just a coincidence that they do some work for the contract that is ending? To know if TUPE does apply, the employer must consider exactly what is happening on the ground, regardless of the terms of the initial contract.
2. The transferee wants to make redundancies on day one and asks the current employer to give the staff notice before they transfer
Such redundancies will be a result of the transferee not requiring the staff, therefore, the notice for redundancy must be given by them. The only alternative is to make the staff redundant on the transfer date after pre-transfer consultation and payment in lieu of notice but both are the responsibility of the incoming contractor.
3. Everyone at the factory will transfer when one contract is retendered
This depends heavily on what the staff are doing and why. This was seen in the Eddie Stobart case in which staff ‘happened’ to work on tasks for a particular contract. This was not considered enough to say they were an organised group who were assigned to the outgoing contract and to whom TUPE would apply.
4. The work in the new contract won’t be the same as the work done before, so there is no transfer
You need to ask yourself whether the work will be fundamentally different. In reality, it is often very similar. You mustn’t jump to the conclusion that doing something slightly different will be enough to stop TUPE from applying. Fixing cars in one garage to fixing cars in several garages could be argued to be fundamentally the same. However, case law shows that moving from a fully catered kitchen to a sandwich van was not considered fundamentally the same, so TUPE did not apply.
5. The staff must stay with the transferor if they don’t want to transfer across
If staff genuinely object to the transfer, they are technically resigning. There is no obligation on the outgoing employer to keep those staff after the transfer. They can offer them alternative roles if they wish, but there is no obligation to maintain employment terms.
Need employment law advice?
For professional advice on TUPE or any employment matter, contact Laura Franklin on 01782 205000 or email email@example.com. For unlimited access to our expert employment lawyers, find out more about Your HR service. Alternatively, you can find out more about our employment law services.