A new case has put TUPE in the spotlight once again, this time in relation to a school in Spain which dismissed its teaching staff and closed down before reopening under different management five months later.
This raised the question of whether an employee’s rights under TUPE (the Transfer of Undertakings (Protection of Employment) Regulations) should still have applied.
The Court of Justice of the European Union (CJEU) confirmed that although the school ceased activities for five months, three of those months were the school holidays. Therefore the cessation of activity for two months could not prohibit the risk of TUPE still applying.
This meant that the school’s teaching staff should have been transferred to the new employer, not dismissed.
The TUPE regulations preserve employees’ terms and conditions when a business is transferred to a new employer, but it often causes employers and employees confusion.
TUPE is highly fact sensitive so a careful review of the detail is needed. Here are some of the common myths:
1. If we stop the contract for six months, we can re-tender without TUPE applying
Ending the service and ceasing the service are different things. The tribunal has taken a strict view on what appear to be attempts to avoid TUPE transfers. As seen in the recent case, closing the service or pausing it for a few months, will not mean that TUPE definitely doesn’t apply.
2. We should wait a year after the transfer and then we can change all of the staff terms and conditions as TUPE won’t protect them anymore.
The tribunals have determined that changes to terms and conditions up to two years after a transfer were ‘because of the transfer’. Changes made ‘because of’ the transfer are not permitted. The changes need to be for economic, organisational or technical reasons and employers cannot ‘contract out’ or buy their way out of TUPE by offering a payment to change terms.
This is the essence of TUPE – to protect employee terms when transferring.
3. Let the staff transfer over and then we will start the redundancy process for just them, our staff will be fine.Once the staff have transferred over they are your employees and part of the wider team. If the company then decides to make redundancies – all staff affected should be put through the redundancy process. This means you cannot single out the transferred staff who do the same role as your original staff. If you did this they would be redundant ‘because of’ the transfer and this would not be fair selection.
It is possible to consult prior to transfer and process redundancies at the point of transfer. This deals with areas where a company may feel they will end up with too many cleaners for example. This process is known as pre-transfer consultation and it means they are redundant on the day of transfer.
4. 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. If they do have alternative roles, they can offer them but there is no obligation to maintain employment terms.