By Eve Clennell
I’m expanding my business and buying out one of my competitors. I’ve be warned about Transfer of Undertakings (Protection of Employees) (TUPE). Can you explain what I need to do?
If you are taking over the operation of another business or service then, in most cases, the workers of that company or service provider are entitled to protection under the Transfer of Undertakings (Protection of Employees) regulations. In short you need to honour the contracts, pay and conditions of the workers you will be inheriting when you take over the other business.
Firstly you need to establish which employees will be affected. If you are buying the whole of the company then all of the employees will have rights under TUPE, however, if you are only buying part of the business they those who are, for the most part, assigned to the part of the business you are buying, will be offered protection.
Once you have established who is affected then your next duty is to keep people informed. You can do this either through a trade union or an elected employee representative or on an individual basis. The management of the company you are buying have a duty to provide information to you of the employees you are taking on such as identity, age, particulars of employment, disciplinary and grievance records, employee claims and collective agreements. An employee has the right to object to the transfer, however, this means that the employee resigns on the day of the transfer and as such they lose valuable employment rights. TUPE states that "all the transferor's rights, powers, duties and liabilities under or in connection with the transferring employees' contracts of employment are transferred to the transferee (the Purchaser)". This all-embracing concept encompasses rights under the contract of employment, statutory rights and continuity of employment and includes employees' rights to bring a claim against their employer for unfair dismissal, redundancy or discrimination, unpaid wages, bonuses or holidays and personal injury claims etc. Employees therefore have the legal right to transfer to the new employer on their existing terms and conditions of employment and with all their existing employment rights and liabilities intact. Effectively, the new employer steps into the shoes of the old employer and it is as though the employee's contract of employment was always made with the new employer. For this reason it is essential that employers know all about the employees they might inherit if they are buying a business. This is the broad principle of the legislation and there are a number of intricacies and as such you really need to gain professional advice to ensure that you are fully compliant with the current legislation. If you need further advice and practical help from Eden Hr Consulting on this please feel free to contact me.
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