TUPE Regulations and Transfers

The TUPE (Transfer of Undertakings and Protection of Employment) Regulations 2006 apply in cases where the ownership of a business changes.

The law surrounding changes to business ownership and TUPE can be complex. There is often much confusion surrounding the takeover of a business.

With a small number of exceptions, in the vast majority of cases the change of business ownership will come under the umbrella of TUPE. This is in keeping with the purpose of the European directives in this area of law, which were designed to promote better treatment for workers.

If the business you work for is in the process of transferring ownership, it is important to establish quickly where you stand with regard to job security and the terms and conditions of your employment.

Changes to terms and conditions of employment

Employers' ability to vary terms of conditions before or after a TUPE transfer are restricted by the TUPE regulations. Even if you were to consent to changes to your terms and conditions, your employer's right to make those changes are limited.

European Law protects employees by ensuring they cannot waive certain important rights. If there are changes to your terms and conditions of employment, they cannot be made purely because of the transfer of the business to new ownership.

However, the old employer and the new employer can vary terms and conditions if those changes are not made solely as a result of the transfer.

Economic Technical or Organisational (ETO) reasons for changes

An employer and employee can agree a variation in terms and conditions if the sole or main reason is connected with the transfer and is an ETO reason (Economic Technical or Organisational reason) that entails changes in the workforce for a reason that is not connected with the transfer.

This summary is very basic, but illustrates that this is a complex and difficult area of law. If you are employed by a business in the process of transferring ownership, and are concerned about changes to your terms and conditions, contact our team for advice.

Transfer-related Dismissals

The TUPE regulations also protect employees' rights in relation to being dismissed as the result of a transfer of ownership. If you work for a business where there is a transfer of ownership, both the old and the new employer have to follow proper procedures in order to dismiss staff where this happens as a result of the transfer.

Employees cannot simply be dismissed by either the old or the new employer, where the sole or main reason is the transfer of ownership - this would be regarded as unfair dismissal.

However, where there is an ETO reason (Economic Technical or Organisational reason) for dismissal at the time of a transfer, it is not automatically counted as unfair dismissal. The TUPE regulations provide for such dismissals to be regarded as being by reason of redundancy.

Do you need advice because the company you work for is changing ownership?

The rules around change of business ownership are complex, and if they affect you, you may wish to consider taking advice from an employment solicitor. Call us now on freephone 0800 422 0241 or complete our contact form and we will get back to you.