If you’re a business owner or manager, you may have heard of TUPE (Transfer of Undertakings Protection of Employment) regulations. But what exactly are they, and how do they affect your organisation?
What is TUPE?
TUPE is a set of regulations that protect employees’ rights when the organisation they work (or part of it) for is transferred to a new owner. This could be due to a merger, acquisition or outsourcing arrangement.
Under TUPE, the employees’ contracts of employment are automatically transferred to the new employer, along with any liabilities and obligations. This means that employees are not disadvantaged by the transfer, and their terms and conditions of employment remain the same.
Who is affected by TUPE?
TUPE applies to organisations of all sizes and across all sectors. TUPE also applies to outsourcing arrangements, where an organisation outsources a service to a third-party provider. In this case, the employees who provide the outsourced service will transfer to the new provider under TUPE.
What are the obligations of the old and new employers?
Under TUPE, the old employer has a duty to inform and consult with employees who will be affected by the transfer. This includes providing information about the transfer, the reasons for it, and any implications for employees.
The new employer has a duty to take on the employees on their existing terms and conditions of employment. This includes any collective agreements, such as trade union agreements, that are in place.
What are the implications of TUPE for organisations?
TUPE can have significant implications for organisations that are involved in a transfer. It can affect the terms and conditions of employment of affected employees, as well as the cost of the transfer. And it can cause disharmony or inequality between the existing workforce and the incoming workforce, where terms are different – for example benefits such as holiday allowance or pensions contributions.
TUPE Steps
Step 1: Identify Affected Employees
The first step in the TUPE consultation process is to identify the employees who will be affected by the transfer. This includes employees who are assigned to the organisation or service that is being transferred, as well as those who are employed in a support role.
Step 2: Inform and Consult with Employee Representatives
Under TUPE the consultation should usually be on a collective basis, meaning you need to meet with employee representatives, such as trade union representatives or internal representatives elected for this purpose. This should be done in a timely and meaningful way, and needs to include information about the transfer, the reasons for it, and any implications for employees.
If you have 10 or fewer employees, you must inform and consult directly with affected employees if there are no trade union representatives or elected representatives.
You may also consult individually if you have more than 10 employees. We have worked alongside several organisations to support this type of consultation and find it creates greater engagement with the change and can pick up any errors in the personal data being passed to the new employer, before problems are caused.
Step 3: Provide Written Information
Employers should provide written information to employees and their representatives as part of the consultation process. This should include details about the transfer, the identity of the new employer, and any changes (often called ‘measures’) to employees’ terms and conditions of employment. Measures are only allowed for specific reasons and need to be considered carefully before decisions are taken.
Step 4: Consider Feedback and Make Decisions
Employers should consider the feedback received from employees and their representatives, and use it to inform their decision-making. This may involve making changes to the transfer arrangements or addressing concerns raised by employees.
Step 5: Due Diligence (optional)
Due diligence is an investigation by the new employer to find out as much information as possible about the old organisation / service they are taking on.
It can include looking for details like bonus payments or any enhanced contractual parental leave or redundancy pay. It can also include a request for warranties and indemnities to protect the organisation from unexpected costs and liabilities that arise post-transfer.
While this is a voluntary step, it is likely to support the old organisation if they are able to provide this to the new (for example if they are trying to find a buyer) and can help the new employer to assess risk / viability and identify employment costs and other liabilities. 
Step 6: Employee Liability Information (ELI)
ELI is a set of specific information the old employer must provide the new employer at least 28 days before the transfer date, under the regulations. Employee liability information includes:
- their identity
- their age
- their written statement of employment particulars
- any disciplinary and grievance records, or ongoing cases, from the last 2 years
- any agreements between the old employer and a trade union (‘collective agreements’) that affect the employees’ terms and conditions
- any claims related to the employees’ employment that they’ve made against the old employer in the last 2 years or that the old employer believes they may make when they transfer
Step 7: Engage and support
TUPE transfers can be stressful for the affected employees, their representatives, the colleagues left behind and those already part of the team they are joining. We would advise you to continue consulting those affected after the transfer has taken place, to keep abreast of concerns and support them as they adjust after the transfer.
TUPE is an important set of regulations that organisations need to be aware of when involved in a transfer. By understanding their obligations under TUPE, and consulting effectively, organisations can ensure that they comply with the regulations, protect the rights of their employees and see a smooth
If you are considering a transfer or need support with due diligence or consultations please get in touch today.