Transfer of Undertakings, Protection of Employment
Jarmans Solicitors TUPE (Transfer of Undertakings, Protection of Employment)
When buying or selling a business it’s important for all parties involved to be aware of TUPE Regulations. TUPE (Transfer of Undertakings, Protection of Employment) relates to workers’ rights and previous employer’s liabilities.
TUPE largely relates to two types of business transfer:
- A transfer of the undertakings of a business, so, this is usually the sale of a business as a going concern
- A change in service provision, an outsourced contract is up for renewal, is awarded to a new company, or is brought back in house.
Current legislation regarding the transfer of businesses is complex and is specifically designed to meet the needs of employees, which is why it is always vital that anyone considering selling or purchasing a business seeks legal advice from the start of the process.
How does TUPE affect a business sale or transfer?
In the case of a business sale or transfer all employee rights and liabilities are transferred from their previous employer to the new business or organisation. For employees, the only thing that really changes for them is who pays them, everything else should remain the same. The transfer includes maternity and sick leave and notice periods. Employment start dates also remain the same.
For employees who object to the transfer, their employment comes to an end and they lose any rights to claim unfair dismissal. The only cases where an employee should not be transferred are if they are on a temporary assignment to the part of the business being transferred or if they work in two of more parts of the business and the section that is being transferred/sold isn’t their primary workplace.
For employers, it is important to remember that you cannot change an employee’s terms and conditions before a transfer or sale of the business, and new employers cannot make any changes either if the reason for the change is the transfer itself. A new employer can change employee contracts and terms and conditions for economic, technical, or organisational reasons or for positive reasons if the employees agree. So, for example, they could implement pay rises or increase the amount of paid holiday available.
It is also worth noting that employees cannot be made redundant simply because they have moved from another employer. The redundancy process still remains the same.
TUPE Regulations are extremely complex and anyone considering a company sale of transfer should speak to an experienced Employment Solicitor. Jarmans Solicitors have a dedicated team of employment law specialists who can guide you through every step of the process.
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