TUPE Regulations Explained
TUPE is the shortened name given to the Transfer of Undertakings (Protection of Employment) Regulations 2006. TUPE rules exist to protect employees’ rights when an organisation or service they work for transfers to a new employer. The TUPE Regulations apply to businesses of all sizes and they are designed to protect the workforce from losing their jobs, or employment rights, in the transfer.
In simple terms, the TUPE regulations mean that a new business owner inherits the existing workforce and those employees must be employed on the same terms as before. It is a complicated process and if it involves a merger, the new combined business can end up with employees on different pay scales and benefits.
TUPE also has implications for employers too – those who are making the transfer (known as the outgoing employer) and those taking on the transfer (known as the incoming employer).
When does TUPE apply?
There are two situations where TUPE applies – business transfers and service provision transfers.
Business Transfers - TUPE applies if a business - or part of a business - moves over to a new owner or merges with another business. The identity of the employer must change to qualify for protection under TUPE Regulations.
Service Provision Transfers - The regulations apply if services are outsourced. This could take shape as a contractor taking over a service that was previously done in house (known as outsourcing), a new contractor taking over services from a previous contractor (known as re-tendering), or an outsourced contract is transferred in house.
The Transfer Process
The regulations require both the outgoing and incoming employers to inform and consult with employee representatives or a trade union before a transfer of ownership takes place.
As an employer, it is important to remember that this information must be provided to employees with enough time to allow for ‘meaningful consultation’ on the issue. If you do not do this, you can be penalised.
An employer must consult with employee representatives about anything to do with the transfer that is likely to affect employees and then seek to reach an agreement. The consultation should cover:
That the transfer is going to happen, when it’s happening and why
How the transfer is likely to affect employees – for example, could employees have to use new systems, or integrate with new teammates?
Whether the new employer might consider something like redundancy or restructuring the business.
If your business has fewer than 10 employees, you can inform and consult directly with employees themselves.
Disclosing employee information during the transfer process
28 days before a transfer is completed, the outgoing employer must share information about employees with the new employer. This is designed to help the new employer to get to know the employees they will be working with and to get to grips with their rights and duties.
The information that needs to be shared normally includes:
Name and age of employees
The main details in their contract of employment and written statements
Details of any grievances raised by employees in the previous 2 years
Disciplinary action taken against employees in the last 2 years
Legal action taken by employees in the previous 2 years and any potential legal action the employer things the employee might raise in the future
Employment contract transfers
When a new employer takes over a business, TUPE regulations state that they must take over their new employees’ employment contracts. Their terms and conditions of employment will transfer – along with holiday entitlement and length of continuous employment.
It is a breach of contract if a new employer fails to meet the terms of the existing employment contracts. However, a new employer can change an employee’s terms and conditions if the reason is economic, technical or organisations (ETO) – which broadly relate to company performance, technical process, or company structure.
The new employer can introduce changes to terms and conditions that are favourable to the employee – for example, increasing annual leave to bring everyone to the same amount of annual leave.
When it comes to redundancies, a new employer cannot make employees redundant based just on the transfer. If an employer were to be made redundant with the main reason being the transfer, then it is likely this would be viewed as unfair dismissal by an employment tribunal.
However, if an employee is made redundant because of one of the ETO reasons above, they may be entitled to a redundancy payment. If a redundancy or dismissal were going ahead regardless of the transfer, TUPE wouldn’t make any difference.
Employees do have the right to refuse to work for a new employer. If the employee tells their employer or the new employer that they wish to leave, then their employment will end at the time of the transfer.
We ensure TUPE transfers run smoothly and sensitively.
When a cleaning contract is awarded to a new cleaning company it can be an incredibly worrying time for those involved. The incoming contractor may have new ways of working and it can be an anxious time for those whose roles are affected by the transfer.
At Brilliant Hygiene Services we have a depth of experience in TUPE and we know how to take the stresses out of the process. We have adopted a people centred approach to TUPE that ensures open, honest dialog with all those affected from the moment the contract is awarded.
Managing Director Ian Campbell explains "Many people see TUPE as a difficult process and one fraught with legal challenges, but it really is a simple process. In addition, it is often a combination of factors including poor performance that leads to a contract change and TUPE may seem to 'protect' poor performing teams. The reality is that it is always the management of the teams that has failed and not the teams themselves. Put simply TUPE is a framework that allows the new contractor to keep the original team allowing them the opportunity to better manage and develop them than the previous contractor".
For more information on how Brilliant Hygiene Services can transfer, manage and develop your cleaning team under TUPE, or if you are interested in discussing your existing cleaning contract please call our team on 01283 777500 or visit www.brilliantnow.co.uk.