Transfer of undertakings (TUPE) – What exactly is TUPE?

TUPE refers to the “Transfer of Undertakings (Protection of Employment) Regulations 2006” as amended by the “Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014”. The TUPE rules apply to organisations of all sizes and protect employees’ rights when the organisation or service they work for transfers to a new employer.

TUPE applies to the private sector, the public sector and the third sector. There are two situations when the regulations may apply; business transfers and service provision changes. Collectively these are called “relevant transfers”. In some instances, a service provision change can also qualify as a business transfer.

The TUPE regulations can apply when a company is sold, activities are outsourced, brought in-house, transferred or a contract for services is moved from one provider to another.

Employees from the newly-acquired business, service or contract will transfer automatically to the incoming employer. Their terms and conditions of employment (apart from occupational pensions) and continuity of service transfer with them and they also receive certain protections around dismissal and redundancy.

TUPE has impacts for

  • the employer who is making the transfer (also known as the outgoing employer or the transferor)
  • the employer who is taking on the transfer (also known as the incoming employer, the ‘new employer’ or the transferee)
  • the affected employees, including any employees remaining with the outgoing employer and existing employees of the incoming employer as well as those who are transferring.

Rules about employee rights in transfer situations have been around for a long time, originating from European legislation in 1977 which resulted in what is now known as the Acquired rights Directive.

In order to implement that directive, the UK government first enacted TUPE regulations in 1981. Further regulations took effect in 2006, and included the introduction of ‘service provision changes’ (outsourcing, in sourcing and re-tendering) and changes concerning the supply of information to incoming employers in insolvency situations and contract variation.

On 31st January 2014, the regulations on TUPE came into effect updating the 2006 regulations.

Acas have produced a leaflet to help employers better understand what the changes mean and how they may affect their business. Link below:

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