Business Transfers

There are two definitions of a TUPE (Transfer of Undertakings (Protection of Employment) Regulations) transfer;

• Transfer of undertakings or businesses
  
  TUPE will apply to the transfer of an undertaking or business situated in the UK immediately before the transfer. TUPE can also apply to the transfer of part of a business

• Service provision changes
  
  The definition of TUPE transfers extends specifically to cover the relationship between clients and the contractors who provide services for them.

The two definitions govern whether TUPE applies and some transfers will qualify both as a business transfer and a service provision change. Employers need to be fully aware of what potential risks and liabilities they may be taking on and how best to protect themselves.

When TUPE applies to a transfer, there is an automatic transfer of employees as well as a number of right and liabilities from the transferor to the transferee.

Caution must also be exercised with regards to transfer-related changes to employees’ terms and conditions and dismissals, which could be deemed as automatically unfair. Therefore, both transferors and transferees must be fully aware of the various effects of a TUPE transfer on their workforce and obligations, particularly if they intend to limit their exposure to claims in Employment Tribunals from employees.

The Regulations also place obligations upon parties to inform and consult with affected employees, failure to meet such obligations can lead to awards of up to 13 week’s salary per employee.

The Employment Department at Eric Robinson can advise both transferors and transferees on TUPE provisions to avoid costly Employment Tribunal litigation.