Guide to Transfer of Undertakings Protection of Employment

Setting the Scene

Our HR Flex team have commented on the recent increased demand for TUPE expertise. In short, TUPE The Transfer of Undertakings (Protection of Employment) Regulations protects employees' terms and conditions of employment when a business or undertaking, is transferred from one organisation or owner to another.
 
As a result of a recent hearing, TUPE now applies to purchasers of insolvent businesses out of administration. As a consequence of this ruling organisations need to factor in the costs of transferring staff on their existing terms of employment and continuity of service into their commercial considerations, negotiations and strategy.
 
According to a report in Personnel Today recently, “It was previously held that the TUPE Regulations did not apply to administrations as the intention would usually be to continue to trade the business, unlike in cases of bankruptcy and liquidation. There would therefore be no automatic transfer of contracts of employment.”
What does this mean to you since the change in the law, if you are purchasing a business out of administration? In a nutshell, you will need to take responsibility for potential claims, such as unfair dismissal and redundancy, from existing pre-transfer staff  as well as needing to know much more about those staff so you can fully consider the costs and implications.

From our experience of managing TUPE projects, the following is what makes us successful:

We give you a clear understanding

As part of any TUPE project, it is our role to clearly explain each step of the process, meaning your company clearly understands what needs to be done next and crucially, to ensure that your organisation does not fall foul of the law or make costly mistakes. 

We focus you on good communication

TUPE is required during significant periods of change, making clear communication critical between 1) both organisations and 2) transferring personnel; furthermore, there are many legal requirements around what needs to be communicated, how this should be undertaken and when. 

Our experts will work with you to ensure that your affected employees clearly understand the implications of TUPE on them. We will work with you to explain what changes you can make and what risks there may be in any changes you want to make. We will help you plan the changes and the communications strategy to ensure the workforce is well informed and positive about the process. Other areas include clearly communicating proposed company structure, changes in benefit packages, plus management and personnel changes where necessary. 

Getting all the facts – warts and all

Fact finding may sound like common sense but there are many grey areas within TUPE.  The provision of information helps to manage risk and to make sure you are legally compliant.  An example of this can be broadly comparable pension schemes.  The costs can be massive and in some cases, cost prohibitive.
 
As part of the “warts and all” scenario, as an employer taking on additional people, you need to be aware of any claims or grievances.  Do you know if the situation can be resolved and do you have a clear understanding of what has gone on to date?

Ensuring that an organisation is in possession of all the facts before an acquisition can save a lot of time – and more importantly financial pain.

For more information on how our HR Flex service can help you please contact either Paul Connor, Fraser Silvey or Sam Gilson on 01491 414 010 or email us at tccinfo@connor.co.uk