The TUPE Regulations apply to the transfer of a business from one owner to another provided that the business retains its identity. The TUPE Regulations cover the transfer of part of a business. They now also include a ‘service provision change’. This can occur when a business outsources work, transfers the work to another contractor or brings it back in-house. So, TUPE can apply in any of the following situations:
- all or part of a business is sold
- there is a merger
- the sale of some of the assets of a business
- a change of licensee or franchisee
- contracting out of services
- changing contractors
The TUPE Regulations protect you from dismissal and from many significant changes to your terms of employment as a result of the transfer of ownership of your employer’s business or contracts. Many complex situations arise in connection with the transfer of businesses and outsourcing. There may be some form of re-structuring or redundancies. You may have to move to another location or face some other change to your working arrangements.
Employees who are affected by a transfer of ownership of a business or a contract must be informed about it in advance and in many cases consultation is required.
There are special rules on redundancy following a TUPE transfer.
If you have been dismissed because of a TUPE transfer or for a reason connected with it, you are able to bring an unfair dismissal claim provided that you have been employed with the company for at least at least 2 years. An unfair dismissal claim must be brought within 3 months of the last day of employment.
If you are dismissed because of a TUPE transfer and the dismissal is unfair, compensation in an employment tribunal is partly calculated in the same way as a redundancy payment but there will be additional compensation for loss of earnings and benefits. Claims for loss of earnings can be brought up to £89,493 or 52 weeks’ pay, whichever is lower. There are a number of factors which the employment tribunal will consider when coming to a decision on the right amount of unfair dismissal compensation. The employment tribunal can, in some cases, order the employer to take the unfairly dismissed employee back into employment and additional unfair dismissal compensation may be awarded if the order is not complied with.
Where formal consultation is required, if this is not carried out properly, additional compensation may be payable.