TUPE - or to give it its full name, the Transfer of Undertakings (Protection of Employment) Regulations 2006 – is a piece of legislation that aims to protect the rights of employees when the business in which they are employed changes ownership.
TUPE also applies to ‘service provision changes’. This is when a service is carried out by one employer and subsequently is carried out by someone else. This happens when a service is outsourced, for example, or you might see it where on train operator takes over the running of a train line from another.
TUPE refers to the old employer as the "transferor" and the new employer as the "transferee". The TUPE Regulations are complex. However, in essence, it gives protection to employees whose employment transfers and aims to ensure they are not disadvantaged when they become employed by the transferee.
That means that their length of service with the transferor is carried over and continues and that their terms and conditions remain the same.
The application of TUPE is automatic and, apart occupational pension schemes, the idea is that everything should remain more or less the same when working for the transferor as it was when working for the transferee.
There are enhanced rights when it comes to dismissal when TUPE applies. For example, it would be automatically unfair to dismiss an employee if the reason for the dismissal is the transfer itself. In that sense, the transferee cannot simply refuse to take on an employee where TUPE applies.
TUPE also imposes certain obligations on employers – both the old and new employers – to consult the workforce about the transfer and any measures that will affect them. There are financial penalties for failure to do so.
