TUPE - Transfer of Undertakings (Protection of Employment) Regulations

The Transfer of Undertakings (Protection of employment) regulations, known as TUPE, govern the transfer of an undertaking (that’s a business or part of one) to a new employer.  The TUPE regulations also cover changes in service provision thereby protecting workers who are assigned to a contract that is being reassigned or is being brought back in-house.

The TUPE regulations strengthen the rights of staff  involved in transfers, providing them with continuity of employment and the same terms and conditions as they had prior to the transfer.

What are the TUPE regulations?

First introduced in 1981, the Transfer of Undertakings (Protection of employment) regulations were introduced to protect workers involved in transfers. They were introduced to comply with the European Community Directives covering the transfer of employees. The TUPE regulations have subsequently been amended and are now known as TUPE 2006.

When do the TUPE regulations come into effect?

TUPE 2006 came into force on 6 April 2006.

What are the main changes in the 2006 TUPE regulations?

TUPE 2006 entirely replaces TUPE 1981.The main changes are:

• A widening of the scope of the Regulations to cover cases where services are outsourced, insourced or assigned by a client to a new contractor.
• A new duty on the old transferor employer to supply information about the transferring employees to the new transferee employer (by providing employee liability information.
• Special provisions making it easier for insolvent businesses to be transferred to new employers.
• Provisions which clarify the ability of employers and employees to agree to vary contracts of employment in circumstances where a relevant transfer occurs.
• Provisions which clarify the circumstances under which it is unfair for employers to dismiss employees for reasons connected with a relevant transfer.
• The rights and obligations in the 1981 Regulations remain in place, though the 2006 regulations contain revised wording at some points to make their meaning clearer, as well as reflecting developments in case law since 1981.

Source: Department of Trade and Industry 

History of TUPE

First introduced in 1981, the Transfer of Undertakings (Protection of employment) regulations were introduced to protect workers involved in transfers. They were introduced to comply with the following European Community Directives.

European Community Acquired Rights Directive 77/187/EEC. This was amended by the European Community Acquired Rights Directive 98/50 EC and these two directives were consolidated in the European Community Acquired Rights Directive 2001/23/EC.

TUPE case law

• Matthews & Others v Kent & Medway Towns & Fire Authority and Others – the House of Lords' landmark judgment concerning the rights of retained part-time firefighters to the same pension and sick-pay benefits as full-timers.
• Sweetin v Coral Racing – compensation paid as a result of failure to inform and consult as required by TUPE consult.
• Baxter and others v Marks & Spencer and others - duty to inform and consult employee representatives about a TUPE transfer.  
• G4S Justice Services (UK) Limited v Anstey and others - case looks at dismissals and TUPE transfers. 
•  Skillbase Services Limited v King - The Court of Session has decided that time spent working on a particular project is only one factor to consider in determining whether an employee was assigned to a project in a TUPE transfer.
• Davies and Baig v Eton Air Limited - ruling says contract loss is not a TUPE issue.

The following three cases look at when a job is covered by TUPE:

• Botzen v Rotterdamsche Droogdok Maatschappij BV.
• Birmingham City Council v Gaston.
• Celtec Ltd v Astley.

Search for TUPE case law at the Tribunals Service.

Legal advice for employers

• The TUPE 2006 regulations in their entirety.
• The Department of Trade and Industry outlines the main changes in the 2006 TUPE regulations.
• Julie Quinn, partner, and Sarah Henchoz, associate, Allen & Overy provide answers to TUPE 2006 questions.
• Sarah-Marie Williams, solicitor at Clyde & Co, answers questions on the TUPE Regulations 2005.
• Dr John McMullen, professor of labour law at the University of Leeds, looks at TUPE and share sale takeovers.
• The Chartered Institute of Personnel and Development has produced a useful TUPE factsheet.
• Government advice on employer responsibilities to employees when buying or selling a business.
• Pension rights on transferring employment from the Pensions Advisory Service.
• The UK’s biggest union Unison provides monthly TUPE updates.
• Directgov provides employee guidance on TUPE transfers.

TUPE in the news

• July 2006: Plans to privatise NHS logistics division leads to vote for strike action by staff.
• February 2006: The new Transfer of Undertakings (Protection of Employment) Regulations (TUPE) will significantly strengthen the rights of staff involved in a transfer and will be a "bitter blow" to employers, lawyers have warned. 
• February 2006: The Department of Trade and Industry publishes TUPE guidance.
• September 2005: William Hill wins TUPE case over acquisition of Stanley Racing.
• July 2005: The massive response to consultation delays new TUPE until April 2006.
• June 2005: Betting staff seek TUPE protection.
• April 2005: Times are changing for transfer of undertakings.
• April 2005: Lloyds TSB praised for handling of staff transfer.
• March 2005: Court rules in favour of employees in staff transfers.
• March 2005: Pension protection added to TUPE transfers.
• March 2005: DTI spells out TUPE change proposals.
• March 2005: TUPE changes promise clarity, at a cost.
• November 2004: Deciding what jobs are covered by the rules
• June 2004: A look at the code of practice on public sector staff transfers.

TUPE discussions on PersonnelToday.com

Add your voice to the TUPE discussions currently taking place on:

• Second generation transfers
• TUPE regulations
• TUPE and contracting

Join the discussions at www.personneltoday.com/discussionforums

Email Personnel Today with your TUPE experiences and best practice approaches to managing transferring employees.  

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