The TUPE (“Transfer of Undertakings (Protection of Employment”) Regulations 2006 protect employees’ rights when a business moves from one company (the transferor) to a new company (the transferee). They require both the transferor and the transferee to provide information to staff who may be affected by the transfer and may be required to consult with elected employee representatives. The information that the transferor is required to provide includes the fact that the employees’ employment will be transferring to the transferee, the date of the transfer, the reasons for the transfer as well as any legal, economic and social implications of the transfer. Although there are no set time limits for this process, the transferor has to provide the employees or their representatives with the information long enough before the transfer to enable meaningful consultation to take place if necessary. If the information and consultations obligations are wrongfully ignored, each affected employee can bring a claim to the Employment Tribunal for which the maximum award of compensation can be up to 13 weeks' pay.
In relation to the transfer of employment itself, The TUPE Regulations 2006 stipulate that the contract of employment between the employee and the transferor is transferred without any changes with the exception of occupational pensions to the transferee. Any dismissals by the transferee in connection with the transfer will be automatically unfair as long as the employee has 1 year’s continuous service (2 years for employees starting with the transferor after 6 April 2012) and any variation of the employee’s terms and conditions of employment by the transferee will be void. However, the transferee has a potential defence if the dismissal is genuinely for an economic, technical or organisational reason entailing changes in the workforce. The dismissal must then satisfy the standard test of reasonableness.
Claims under the TUPE Regulations 2006 must be brought in the Employment Tribunal within 3 months of the transfer or the dismissal.