TUPE Regulations 2006

A particular type of recruitment is when you take over another business and with it, the existing workforce. In doing so the above Regulations impose certain obligations upon you as a new employer.

When taking over a new business the likelihood is that you will use the services of a solicitor, but if you do not do so it is most important that you understand and comply with the Regulations.

Subject to certain qualifying conditions, the Regulations apply:

(a) when a business or undertaking, or part of one, is transferred to a new employer ; or

(b) when a “service provision change” takes place (for example, where a contractor takes on a contract to provide a service for a client from another contractor).

These two circumstances are jointly categorised as “relevant transfers”.

Broadly speaking, the effect of the Regulations is to preserve the continuity of employment and terms and conditions of those employees who are transferred to a new employer when a relevant transfer takes place. This means that employees employed by the previous employer (the “transferor”) when the transfer takes effect automatically become employees of the new employer (the “transferee”) on the same terms and conditions (except for certain occupational pensions rights). It is as if their contracts of employment had originally been made with the transferee employer. However, the Regulations provide some limited opportunity for the transferee or transferor to vary, with the agreement of the employees concerned, the terms and conditions of employment contracts for a range of stipulated reasons connected with the transfer.

The Regulations contain specific provisions to protect employees from dismissal before or after a relevant transfer. The general law on unfair dismissal and redundancy applies and, in addition, the Regulations specify that neither the existing employer nor the new employer may fairly dismiss an employee

- because of the transfer itself or

- for a reason connected to the transfer unless that reason is an “economic, technical or organisational reason entailing changes in the workforce.”

Any dismissal will be automatically unfair unless there is such a reason.

The Regulations also place a duty on the transferor employer to provide information about the transferring workforce to the transferee employer before the transfer occurs. (See below – Employee Liability Information.)

Representatives of affected employees have a right to be informed about a prospective transfer. They must also be consulted about any measures which the transferor or transferee employer envisages taking concerning the affected employees. (See below – Consultation with the affected workforce.)

The Regulations make specific provision for cases where the transferor employer is insolvent by increasing, for example, the ability of the parties in such difficult situations to vary contracts of employment, thereby ensuring that jobs can be preserved because a relevant transfer can go ahead.

The Regulations can apply regardless of the size of the transferred business : so the Regulations equally apply to the transfer of a large business with thousands of employees or of a very small one (such as a shop, pub or garage). The Regulations also apply equally to public or private sector undertakings and whether or not the business operates for gain, such as a charity.

EMPLOYEE LIABILITY INFORMATION

As the new employer you should expect to receive from the transferor the following “employee liability information”:

- the identity of the employees who will transfer ;

- the age of those employees ;

- information contained in the “statements of employment particulars” for those employees ;

- information relating to any collective agreements which apply to those employees ;

- instances of any disciplinary action within the preceding two years taken by the transferor in respect of those employees;

- instances of any grievances raised by those employees within the preceding two years ; and

- instances of any legal actions taken by those employees against the transferor in the previous two years, and instances of potential legal actions which may be brought by those employees where the transferor has reasonable grounds to believe such actions might occur.

If any of the specified information changes between the time when it is initially provided to the transferee and the completion of the transfer, then the transferor is required to give the transferee written notification of those changes.

The information must be provided in writing or in other forms which are accessible to the transferee. So, it may be possible for the transferor to send the information as computer data files as long as the transferee can access that information, or provide access to the transferor’s data storage. Likewise, in cases where a very small number of employees are transferring and small amounts of information may be involved, it might be acceptable to provide the information by telephone. However, it would be a good practice for the transferor to consult the transferee first to discuss the methods which he can use.

This information should be given at least two weeks before the completion of the transfer. However, if special circumstances make this not reasonably practicable, the information must be supplied as soon as is reasonably practicable.

The Information Commissioner’s Office (ICO) has published guidance to help organisations comply with the Data Protection Act when providing information about their employees under the TUPE Regulations. A copy of the guidance can be downloaded at www.ico.gov.uk

CONSULTATION WITH THE AFFECTED WORKFORCE

The Regulations place a duty on both the transferor and transferee employers to inform and consult representatives of their employees who may be affected by the transfer or measures taken in connection with the transfer. Those affected employees might include:

(a) those individuals who are to be transferred ;

(b) their colleagues in the transferor employer who will not transfer but whose jobs might be affected by the transfer ; or

Long enough before a relevant transfer to enable the employer to consult with the employees’ representatives, the employer must inform the representatives:

that the transfer is going to take place, approximately when, and why;
the legal, economic and social implications of the transfer for the affected employees;
whether the employer envisages taking any action (reorganisation for example) in connection with the transfer which will affect the employees, and if so, what action is envisaged;
where the previous employer is required to give the information, he or she must disclose whether the prospective new employer envisages carrying out any action which will affect the employees, and if so, what. The new employer must give the previous employer the necessary information so that the previous employer is able to meet this requirement.

If action is envisaged which will affect the employees, the employer must consult the representatives of the employees affected about that action. The consultation must be undertaken with a view to seeking agreement of the employee representatives to the intended measures.

During these consultations the employer must consider and respond to any representations made by the representatives. If the employer rejects these representations he must state the reasons. If there are special circumstances which make it not reasonably practicable for an employer to fulfil any of the information or consultation requirements, he must take such steps to meet the requirements as are reasonably practicable.

Further Guidance to the Regulations is available at http://www.berr.gov.uk/ ..Advice can also be obtained from the Helpline.

All PBS information sheets are designed to provide the detail you need to implement best business and employment practices. They are not a detailed commentary on the current law and where advice is needed in a specific case you should contact PBS for expert consultation.

Recruitment 8

ACS

Main menu