Transfer of a Business (TUPE)
The TUPE Regulations (Transfer of Undertakings) apply to situations where there is a change of employer due to a relevant transfer, often the transfer of the whole or part of a business, and the business retains its identity after the transfer.
The rights of employees are protected in these situations where their employer has been taken over as a “going concern”. The new employer effectively takes over all the rights and liabilities which existed between the employee and the previous employer
Employee
In a situation where the TUPE Regulations apply, the employee’s contract is transferred to the new employer and their terms and conditions should remain the same. In addition, an employee’s length of service includes the period that they were employed prior to the transfer. Where terms and conditions of an employee’s contract are changed on or after the transfer, the employee may have a claim for breach of contract.
Employees should also be aware that if they have been dismissed by either their old or new employee because of the transfer then they may have a claim for unfair dismissal.
If your terms and conditions of employment have been altered, or you have been dismissed due to a transfer, please contact our Employment Department for advice.
Employer
When a transfer falls under the TUPE Regulations there are employment law consequences for both the original employer (the transferor) and the new employer (the transferee).
The transferor has an ongoing duty to inform and update the transferee on a number of issues including providing information about all the employees and their contracts of employment and any pending or recent employment litigation.
Employers should also be aware that there is potential for unfair dismissal claims to arise if the TUPE Regulations are not adhered to. In particular, any dismissal by a transferor or transferee for a reason to do with the transfer may be deemed automatically unfair.
If you are an employer contemplating taking over a business we would strongly advise that you contact our Employment Team for advice before doing so.