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Tupe regulations: an SME guide to Tupe transfers


Companies selling their business or outsourcing services can come unstuck under Tupe. Our guide should help you stay on the right side of the law.

 

What is Tupe?

Tupe is the Transfer of Undertakings (Protection of Employment) Regulations 2006. Protecting employees where their work transfers from one entity to another, it applies:

  • where a business is sold; and
  • where there is a ‘service provision change’ with an activity being outsourced; moved from one contractor to another; or brought back in-house.

The employment of individuals engaged by the seller or the client (the Transferor), and who are ‘assigned’ to the relevant activity, will transfer to the buyer or the new contractor (the Transferee).

Tupe law

Jemma O’Reilly, principal associate at Wragge Lawrence Graham & Co LLP, outlines the key dos and don’ts.

  • Do think about it early. Scope out whether TUPE might apply, identify the employees who will be affected by it and consider what implications the transfer might have for them.
  • Do comply with the duties to inform and consult with employee representatives or risk significant penalties.
  • Do remember to provide employee information to the transferee if you are a transferor.
  • Don’t make plans to dismiss employees or change their terms and conditions of employment (including relocating them) without careful thought. TUPE provides employees with enhanced protection here.
  • Do decide what risk and liability you are prepared to accept and agree appropriate contractual provision for it. Most liabilities and obligations related to the employees automatically transfer to the transferee and so the transferee will need to obtain protection from the transferor covering matters arising before the transfer.
  • In a service provision change situation, don’t forget to think about what will happen when the services agreement terminates and do make appropriate contractual provision for it.

For more guidance please see:

 

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