Being forced to TUPE transfer between employers can be a very unsettling, demoralising and potentially costly experience.
It could be that your employer is involved in a business merger or sale. That it no longer wants to continue carrying out your type of work. Or it believes it can get the work you do performed more efficiently or cheaply if you carry it out whilst employed by a different company (known as outsourcing).
The law governing these circumstances – where your contract of employment is switched to a different employer – is known as the Transfer of Undertakings (Protection of Employment) Regulations. TUPE for short.
It is important you understand the consequences for you of a TUPE transfer – and from where you can receive help and support, even if you have not previously been a union member.
Purpose of TUPE Regulations
The TUPE Regulations have three primary purposes:
- To provide you with some limited protection of your terms and conditions for a period after you transfer. But you may lose your pension entitlements and non-contractual benefits.
- To ensure you receive information on the transfer. And that you are consulted about any planned changes to your employment arrangements.
- To provide employers with the flexibility to transfer workers between them.
Whilst the benefits for employers are quite obvious, they are not so clear as they may first appear for the staff concerned.
What TUPE protects
At the time they are transferred between employers, TUPE ensures that:
- The contracts of employment of all workers automatically transfer to the new employer. The terms and conditions detailed in their contracts are protected. In theory, nothing should change other than the employer’s name.
- The period of employment with the first employer should be treated as continuous with the new employer. This is important in relation to legal rights – such as for claiming redundancy, unfair dismissal, etc. – which accrue over time.
- Employees who are dismissed for reasons connected with the transfer can claim unfair dismissal.
- If worse contractual terms and conditions are offered at the time of transfer, workers may have the right to resign and claim constructive dismissal.
- If the new employer attempts to impose new terms and conditions by dismissing workers and re-employing them on the new terms, the dismissal will be automatically unfair.
However, it is important to distinguish between terms and conditions being ‘protected’ and ‘preserved’. It is the latter that applies. Effectively, a ‘snapshot’ is taken at the time you transfer. Everything in theory remains the same. But there will be no guaranteeing that your salary will increase in future. Or that other service-related benefits like holiday entitlement and sick pay will continue to accrue over time.
Furthermore, contractual terms are only protected from changes, where these changes are the ‘sole or principle reason’ for the transfer having taken place. As a rule of thumb, this means they are only protected for a minimum of 12 months. After that, employers have got away with arguing that the reason for changes are primarily driven by what are known as ‘economic, technical or organisational (ETO) reasons’.
What can immediately change?
Importantly, pension entitlements are not protected. Neither are non-contractual benefits – often including bonus and share scheme arrangements. They can be stripped away from you at the time you transfer between employers.
This could cost you many thousands of pounds in lost entitlements.
You will ideally want to be compensated for these potentially significant financial losses.
Transfer or resign
It is very likely that you will be opposed to being forced to change employers. After all, you probably made a conscious decision on who you wanted to work for – unless, of course, this is only your latest TUPE transfer! And now this is being taken away.
But if your transfer of employment genuinely meets TUPE requirements you will have little choice. You must either accept the transfer, or resign. However, if you do resign, it will be without a right to either redundancy pay or compensation.
Redundancies following a TUPE transfer
Downsizing, restructuring and ‘capturing efficiencies’ are often key reasons given for an employer engaging in a TUPE transfer.
That could well mean redundancies.
Where this is to happen, it is up to your current employer to inform and consult you on the likelihood of it happening after you have transferred. However, only once the TUPE transfer is complete can the new employer carry out formal redundancy consultation and start making redundancies.
TUPE information and consultation
One of TUPE’s key requirements is that the current employer intending to conduct a transfer must inform in writing all staff concerned of:
- The details of the transfer, including when and why it is taking place and who exactly will be involved.
- The social, legal and economic implications of transferring, which could include any changes of workplace, redundancies, pensions, etc.
- Any implications of the transfer for those workers employed by the current employer who are not transferring.
- Details relating to the employment of agency staff.
- Any plans that the new employer might be considering in relation to the new employees. This could include any variations to their overall employment package.
Consultation with who?
The current employer must consult with the ‘appropriate representatives’ of those workers being transferred. This must be on any arrangements relating to their transfer.
If union recognition arrangements are in place, this must be with the unions. If not, then (in the case of employers with 10 or more staff) it must be with elected representatives of the workers concerned. These are known as ‘appropriate representatives’.
Consultation will often include any employment arrangements that the new employer will not be replicating. It may include discussions to compensate the workers concerned for their anticipated losses.
Although the current employer is responsible for consultation, the new employer may also be directly engaged in the process.
The purpose of this consultation should be to attempt to reach agreement with the appropriate representatives of the staff concerned. But this doesn’t mean the employers have to necessarily reach agreement – just give the impression of trying.
Worker representatives should set themselves two key goals during the consultation process:
- Extend protection of contractual terms beyond the minimum 12-month period of protection provided by TUPE.
- Negotiate either matching non-contractual benefits, or upfront compensatory payments for those arrangements that the new employer says it cannot or will not replicate.
WRS’s specialists have had considerable success negotiating such arrangements during TUPE transfers.
Professional support and representation from WRS
Our representatives have considerable experience of dealing with TUPE transfers and can support workers affected by them in important ways:
- WRS can provide you with advice and guidance on an individual basis.
- We can make arrangements for you to be accompanied by a union representative at formal consultative meetings with your employer.
- If you are unhappy with how you are being treated, you may also want WRS’s support with taking a grievance against your employer.
- You may want to group together with other employees affected by the TUPE transfer to receive WRS’s support. We cannot insist upon attending collective meetings between your ‘appropriate representatives’ and employer. But we can prepare and guide your ‘appropriate representatives’ through every step of the process, including providing research and briefing papers.
- WRS can provide ongoing support following the TUPE transfer. This is often a critical period. You need to guard against any attempts by your new employer to either change or water-down your terms and conditions of employment – especially after 12 months has elapsed.
WRS’s representatives have in the past secured for people being TUPE-transferred, many thousands of pounds more compensation each than they would otherwise have received. We have also secured binding guarantees providing peace of mind on future terms and conditions beyond TUPE’s limited protection.