According to conciliation service ACAS, TUPE regulations “protect employees’ rights when the organisation or service they work for transfers to a new employer”.
The full name of this set of regulations is the Transfer of Undertakings (Protection of Employment) Regulations 2006. These were updated and amended in 2014 by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014.
There are two main situations when TUPE regulations may apply. They are split out into business and service provision transfers:
The TUPE regulations see employees of a previous employer automatically become employees of a new employer at the point of transfer.
These new workers keep all of their previous employment terms, conditions and rights, as well as their continuous service history. They should therefore continue to enjoy the same employment terms as under the old employer.
Usually, the answer is indefinitely. The regulations prohibit any harmonisation of terms and conditions between new and existing employees if the sole or principal reason for the change is the transfer.
This might lead to a situation where, after a transfer, the new employer finds that they have employees working for them with very different terms and conditions.
Employers must inform / consult with employees through “appropriate” elected representatives. If there’s a trade union, this usually includes representatives from the union. Where there’s no trade union, employees typically vote for representatives from among their colleagues to do the job.
Employers must give certain information about the transfer in writing. This includes:
The emphasis when undertaking a TUPE transfer is on dialogue between the employers (old and new) and the employees.
Although much of this dialogue is a legal requirement, it’s important to really make sure the workforce on both sides of the transfer are as engaged as possible. This will help ensure a smooth transfer process.
Head of Employee Benefits at Drewberry
This is a very difficult area. The answer depends largely on whether the benefits are ‘contractual’. This means they’re written into the employees’ contracts and form an intrinsic part of their working rights.
If so, it’s not generally possible to reduce benefits, such as Company Health Insurance, after a TUPE transfer. This applies even where it may be expensive to provide these benefits and where you don’t offer such benefits to existing staff.
Removing a contractual benefit could, if the employee can prove that it was a sole or principal consequence of the transfer, be deemed unfair. This could allow the employee to resign and make a claim for constructive unfair dismissal.
Other benefits are ‘discretionary’. This means employees’ contracts give you the power to vary or remove them. If so, you may be able to reduce such benefits. However, you should think carefully before doing so. It could significantly impact the morale and productivity of the new staff members.
Moreover, even where there is no contractual breach, the proposed withdrawal of a benefit resulting in a substantial change to working conditions to an employee’s material detriment may entitle an employee to treat themselves as dismissed under clause 4(9) of TUPE.
Such a claim is similar to a standard constructive unfair dismissal claim, although there is no need to establish a fundamental breach.
At Drewberry, we’re experienced in offering TUPE transfer advice. For help transferring over your new employees’ existing insurance or pension rights, pop us a call on 02074425880. We can organise suitable cover that meets your company’s TUPE obligations.
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