TUPE advice for businesses

TUPE obligations are highly complex. It is advisable to seek legal advice at the early stages of a transfer to avoid the risk of costly unfair dismissal claims, Employment Tribunal proceedings and awards for failure to inform and consult under TUPE.

Our team of specialist employment solicitors have a wealth of experience advising clients on how to comply with TUPE regulations. We provide a highly bespoke and personally tailored service which meets the specific needs of your business or organisation. We are here to help employers with:

  • Information and consultation requirements of TUPE
  • Legal advice on redundancies in advance of or following a transfer
  • Unfair dismissal claims arising from TUPE
  • TUPE law training
  • Drafting letters to employees in relation to a transfer of their employment
  • Harmonisation of employment contracts
  • Drafting TUPE provisions in outsourcing agreements

You can rely on us as an expert source of advice on TUPE and we are ever mindful of working within important limiting factors such as management time and legal costs.

What is TUPE and why would I need it?

If you are selling your business, taking over a new business, or changing who provides you with a particular service, it is essential that you understand what ‘TUPE’ (the Transfer of Undertakings (Protection of Employment) Regulations 2006) is and how it will affect your business because there are significant penalties for non-compliance.

In essence, TUPE exists to protect employees’ rights  when there is a ‘relevant transfer’ within scope of the regulations. Employees assigned to the business being sold, or the services being transferred, will automatically transfer to the buyer/new service provider on their existing terms and conditions (with some limited exceptions). Where there is a ‘service provision change’, this includes where services are outsourced, or the service provider changes, or the services are brought back in–house. The buyer/new service provider effectively steps into the shoes of the seller/existing service provider with regard to the transferring employees, meaning that all of the seller’s/existing service provider’s rights, powers, duties and liabilities pass to them.

TUPE requires both the seller/existing service provider and buyer/new service provider to inform and consult in advance with appropriate staff representatives. There are also specific requirements about providing certain information about the transferring employees and any measure proposed to be taken which affect them.

Understanding the rules is essential to getting the process right and undertaking a successful TUPE transfer, with minimal disruption to you and any affected employees.

Getting legal advice about TUPE

  • Contact us as early as possible

Due to the complexity of TUPE situations and the severity of penalties for getting things wrong, it is important to seek legal advice as soon as possible. The earlier issues can be identified, the more options there are for resolving them, and these may often be commercial resolutions to be negotiated between the parties.

  • Representative

Your matter will be allocated to the most appropriate lawyer for your circumstances, who will be able to consider your situation and advise you throughout the TUPE process.

  • Funding options

We offer competitive hourly rates for our work and will ensure that you are provided with clear information on costs upfront and throughout. We would normally also try to offer fixed fee packages.

Why choose our professionals?

Our experienced employment lawyers can assess whether TUPE applies to your particular situation and, if it does, advise you on your obligations and minimise your exposure to claims and sanctions.

  • Experienced Solicitors

We can assist parties with pre-transfer employee due-diligence and information gathering. If your query is in relation to a service provision change we can help you draft contracts and TUPE provisions in outsourcing agreements. We can also advise you if any employees bring Employment Tribunal claims against you in relation to a TUPE transfer.

  • Tailored advice

If you are the seller/existing service provider we will provide tailored advice on informing and consulting (including electing employee representatives); potential redundancies; drafting letters to reps/ employees; commercial negotiations and obtaining appropriate warranties and indemnities from the buyer/new service provider.

  • Knowledgeable Lawyers

If you are the buyer/new service provider, we will work to understand your business objectives and explore how these will be affected by any TUPE transfer. We can advise you on any redundancy/dismissal queries you have, and provide advice about changing terms and conditions and help you to draft new employment contracts for transferring employees. We can also assist with commercial negotiations and obtaining appropriate warranties and indemnities from the seller/existing provider.

Why is early advice on TUPE important?

TUPE rules are complex and uncommercial but the consequences of failing to comply with them can be substantial.

We can help you to ensure that any TUPE transfer your business is involved in is compliant with the regulations. This should mean the avoidance of costly Employment Tribunal claims. We can also advise you on the best way of achieving your commercial objectives and help with the negotiation of warranties and indemnities to better protect your business.

If you do have claims brought against you, we will help you to defend these claims at Tribunal and, if appropriate, negotiate a suitable settlement.

We can also help your business get ready for sale, or integrate transferring employees post-sale in terms of preparing contracts and policies etc.

Case Study: Client achieves commercial resolution after being advised

We advised a sub-contractor on their TUPE obligations when their contract was taken back in-house on short notice by the main contractor, particularly in relation to dealing with employees where there was a dispute as to whether they were assigned to the service being taken back in-house. We helped our client achieve a commercial resolution.

Case Study: Successfully defended Director’s legal claims

We advised a London-based SME in a Directorships dispute involving allegations from one of the co-founders of unfair dismissal, unpaid shares and a contested TUPE transfer. We successfully defended the Director’s legal claims and resolved the dispute.

Case Study: Advised well-known retailed on franchise store acquisitions and other dealings

We advised a well-known retailer on the employment law aspects of number of franchise store acquisitions, including dealing with due diligence and TUPE consultation requirements.

Frequently asked questions

What are the sanctions for breaching TUPE regulations?

Any dismissals by reason of a TUPE transfer will be automatically unfair (though only employees with more than 2 years’ service can claim). If information and consultation obligations are breached an Employment Tribunal can award up to 13 weeks’ actual pay for each affected employee.

There are also potential sanctions for failing to provide information on transferring employees in accordance with the regulations. It is not possible to contract out of TUPE, but the parties to the transaction can agree to give warranties and indemnities in respect of employees any claims that might arise.

We’re thinking about changing the contract of an employee who was recently TUPE-ed over to us…is this allowed?

Under TUPE the ability to make changes to terms and conditions is very limited. The buyer/transferee takes the transferring employees on their existing terms and conditions and can only make changes in limited circumstances.

Even where the employee agrees to the change, if it is less favourable than their previous terms, and the sole or principal reason for the change is the transfer itself, it will be void unless a) the reason for the change is an ‘economic, technical or organisational’ reason, or b) the terms of the contract permit the employer to make such a variation.

We have just acquired a business but cannot take on all the staff - can we dismiss them?

In this situation, it is essential to take legal advice, as it could lead to costly and time consuming litigation.

If an employee is dismissed either before or after a transfer and the reason or principal reason for dismissal is the transfer itself, this will amount to an automatic unfair dismissal (for further information, see our page on unfair dismissal). If, however, the reason for the dismissal is an ‘economic, technical or organisational’ reason then it may potentially be fair (for example by reason of genuine redundancy).

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Address:Hodge Jones & Allen Solicitors
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