TUPE Advice for Employers

What is TUPE and why does it exist?

TUPE stands for Transfer of Undertakings – Protection of Employment. It is in place to protect employees’ rights when they transfer to a new employer. It applies in two cases:

• A business transfer where an organisation is moved to another employer
• A service provider change, such as when a contract shifts to a new company

TUPE applies to UK-based organisations of any size across the public and private sectors, as well as charities.

Who do TUPE regulations apply to

TUPE regulations apply to both the old employer who is making the transfer, and the new employer who is taking on the transfer. It protects anyone who is legally classed as an employee and may protect someone legally classed as a worker.

However, TUPE regulations don’t protect agency workers. If you’re unsure whether an employee is protected, contact us to get legal advice.

Type of TUPE protected transfers

There are two types of TUPE protected transfers; business transfers and service provider transfers.

Business transfers

A business transfer is when a business, or part of a business, moves from one employer to another. For this type of transfer, all of the following must apply:

• The employer is changed
• The main assets transfer to the new employer (employees, equipment, work in progress, goodwill, intellectual property, etc.)
• Business activities remain the same or are similar to what they were before the transfer

Business transfers can include mergers (where two businesses join to form a new one), and businesses that have just one employee.

Service provider transfers

A service provider transfer is where contracts are taken over. This can be due to:

• Outsourcing – a service provided in-house is taken over by an outside company
• Insourcing – a contract ends, and the work is transferred in-house
• Retendering – a contract ends and is taken over by a new contractor

TUPE applies to service provider transfers when there is an organised grouping of employees.

This type of transfer does not apply if the contract:

• Involves only the supply of goods such as car manufacturer changing brake pad suppliers
• Is a one-time event or short-term task like a conference or exhibition

What to do before a transfer

Before carrying out a TUPE transfer, we can provide TUPE advice for employers as there are some things you should consider:

Keep staff informed

Employers must keep affected employees informed about any transfer plans. This includes:

• Employees who are transferring
• Those staying whose work will be impacted
• Those already with the new employer whose work will be affected by incoming staff

Early communication is essential to maintain morale, reduce concerns, build trust, and keep employees motivated. Legally, employers must also inform and consult staff representatives during this process.

Follow due diligence

Due diligence is a formal review by the potential new employer to gather relevant information before the transfer. It helps to:

• Assess risks
• Confirm transfer feasibility
• Identify employment costs
• Determine contract bids for service provider changes

Estimate costs

Before you decide to take on a transfer, it’s important to consider the employment costs, such as:

• Buying new equipment
• Any new work premises
• Wages

These costs will depend on how many employees are transferring to you, and whether they’re paid more than existing employees.

You should also consider if you will have too many employees after the transfer. If so, you may need to make redundancies or pay redundancy costs.

Talking with the other employer

It’s essential to talk with the other employer when carrying out the transfer.

Make a transfer plan

Both the old and new employer should create and share a transfer plan with employees to reduce concerns and ensure the process is followed correctly. One designated person should manage the transfer, providing a clear point of contact and overseeing communications.

This person should also collaborate with trade unions or employee representatives to maintain a positive working relationship.

ELI (Employee Liability Information)

By law, the old employer must provide the new employer with certain information about the employee/s  transferring. This information is known as ELI.

This information includes:

• The employee’s name
• The employee’s age
• The employee’s written statement of employment particulars
• Any disciplinary or grievance records from the last two years
• Any collective agreements with a trade union
• Any claims employees have made against the employer in the last two years

When the old employer must provide ELI

The old employer must give employee liability information at least 28 days before the transfer date. However, we recommend giving this information as early as possible.

You must ensure the information is accurate, up to date and provided securely.

Checks before sending ELI

The old employer should carry out the following checks before sending ELI:

• Ensure all policies covering terms and conditions are included in employment contracts
• Include any recently agreed changes to terms and conditions in contracts
• Check for unwritten terms or verbal agreements with trade unions or employee representatives
• Confirm any agreed changes for specific employees, such as flexible working arrangements

If ELI is incorrect or not provided

The new employer should check that all ELI is provided on time and is correct. If the ELI is given later than 28 days before the transfer date, any information is incorrect, or the old employer fails to inform the new employer of any changes to the ELI, the new employer may be able to make a claim to an employment tribunal.

If the claim is successful, the new employer could receive compensation of at least £500 for each employee whom the employer gave incorrect or no information for.

Staff consultation

By law, both old and new employers must inform and consult with affected employees and their representatives before a TUPE transfer is carried out.

Informing means telling affected employees or their representatives the facts about the transfer, while consulting involves discussing potential changes, and expected measures, and considering employees’ views.

Transfer T&Cs

The new employer should assume all employee terms and conditions transfer unless they get different legal advice. These terms and conditions may include:

• Job title and role
• Pay, including overtime
• Contractual bonuses
• Commission
• Sick leave and pay
• Holiday leave and pay, including outstanding or carried-over holiday
• Allowances
• Insurance-based benefits
• Contractual enhanced redundancy pay
• Terms agreed through collective agreements with trade unions
• Contractual terms from other sources, such as a staff handbook
• Non-contractual terms, like a lorry driver requiring a valid driving licence to work

Pensions

Pensions built up before a transfer are protected and can be transferred to the new employer depending on whether they have:

• Personal pensions (arranged by employees and with employer contributions), the new employer must continue contributions at the same level after the transfer.
• Workplace pensions (arranged by the old employer) typically do not transfer under TUPE. However, the new employer must offer a reasonable alternative scheme, matching employee contributions up to 6%.

Collective bargaining

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

• Collective bargaining agreements such as agreed changes to pay
• Collective bargaining agreements such as how often meetings take place

Collective bargaining agreements are agreements between the old employer and trade union that affect employees’ terms and conditions. Many agreements like increased holidays or shorter working hours continue indefinitely. However, some might only cover a specific period.

Trade unions

Under TUPE, trade union recognition transfers to the new employer only if the transferred employees maintain a separate identity within the new organisation. If recognition transfers, it will transfer under the same terms as before.

Outstanding holiday and pay

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

• Any outstanding wages
• Unpaid bonuses
• Outstanding holiday
• Arrangements to carry over holidays from previous leave years
• Enhanced or contractual holiday

The new employer is responsible for these things even if they are not included in the ELI.

Changing employees’ terms

As a new employer, you must be careful when agreeing on changes to transferred employees’ terms and conditions as there are things to consider if the main reason for changing the contract is the transfer. If you’re unsure when it comes to changing employment terms, get in touch with us now.

Post transfer

After a TUPE transfer, it’s good practice for the old and new employer to continue consulting with employees.

Inform and consult staff

Following the transfer, employers no longer need to inform and consult employees unless there are any proposed changes in working practices or any redundancies.

However, it’s always a good idea to continue informing affected employees so you can understand any concerns and support where necessary.

Old employer

Old employers should regularly engage with employees to ensure reorganisation of teams and work practices is successful and that employees can handle the workload. Best practices include:

• Reassuring affected employees through meetings and updates
• Listening and responding to concerns
• Check employees are coping well after the transfer
• Look at introducing team-building activities and reward schemes

New employer

New employers should try and welcome transferred employees and introduce them to people in their team. They should use an induction process to explain the policies and expected standards and hold regular team meetings to help integrate transferred employees.

Best practices for new employers include:

• Listening to employee suggestions and holding discussions to improve processes and resolve issues early
• Ensuring line managers support employees during the adjustment period
• Considering assigning buddies or mentors to help new employees adapt and address problems quickly

Employees who do not want to work for you

If there are employees who want to leave after transferring, they must tell the employer in writing such as a letter or email. The employer must then confirm leaving dates and pay any outstanding wages and built-up holidays.

The employee isn’t usually entitled to any additional payments orable to claim unfair dismissal.

TUPE when working abroad

TUPE doesn’t always apply to international transfers, however, it could apply in some situations, such as:

• The employee works abroad but the organisation is based in the UK
• The transfer involves relocating the organisation, or part of it, overseas – although this could lead to redundancy

For service providers, TUPE only applies if the group of employees involved is primarily based in the UK.

Why choose 365 Employment law for tupe advice for employers

At 365 Employment Law, we provide expert guidance and personalised support throughout every step of the TUPE transfer process. Your rights are our top priority, and we are committed to ensuring a smooth transition. With extensive knowledge of employment law, we offer tailored advice and solutions designed to fit your specific needs. Contact us today to learn more.

FAQs

What obligations do I have as the old employer under TUPE?

You are required to inform and consult with affected employees and their representatives about the transfer. Additionally, you must provide the new employer with details of transferring employees’ rights and liabilities.

Do employees have to transfer under TUPE?

Yes, employees automatically transfer under TUPE unless they object to the move.

Do I have to continue existing pension schemes post-transfer?

For workplace pensions, you don’t have to maintain the same scheme, but you must offer a reasonable alternative and match employee contributions up to 6%.

How can I support employees through the transfer process?

Communication is key. Engage with employees regularly, listen to their concerns, and reassure them with updates. Implement team-building activities and support to help them adjust smoothly.