Good practice: TUPE

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Summary Case study Key references Overview The importance ofobserving good practice when implementing a transfer Benefits for the transferor of engaging with its employees Benefits for the transferee of engaging with transferring employees Benefits for the transferee of engaging with existing employees Recognising a relevant transfer Transfer of an economic entity Service provision change Identifying a transfer What should employers inform and consult about? Comprehensive information Meaningful consultation Timing of the information and consultation process Timescale for informing Timescale for consulting Trade union and employee representatives Which representatives? Employee representative elections Training employee representatives Facilitating contact The information and consultation forum The format of the information Consultation meetings Direct employee engagement Transferee involvement Engaging with the transferee’s existing employees Employee liability information The importance of sharing information The subject matter Format and accuracy Use of employee liability information Transfer of personnel files The transferor’s records Managing employees following the transfer Gathering information Integrating the two sets of employees Trouble shooting Harmonising terms and conditions Dismissals following the transfer The transferor’s remaining employees Mitigating the consequences of TUPE

Summary

• Employers that engage with employees during the transfer of an undertaking are likely to minimise disruption to their business and help to ensure its future success. (See The importance of observing good practice when implementing a transfer)
• TUPE applies in a wide range of circumstances, including the sale of a business and outsourcing and insourcing transactions. (See Recognising a relevant transfer)
• Employers should give trade union (or employee) representatives enough information to enable them to participate fully in the consultation process, and they should enter into consultation with an open mind. (See What should employers inform and consult about?)
• The circumstances of the transfer will dictate when the employer begins informing and consulting employees, but the sooner the process starts, the more likely it is to be meaningful. (See Timing of the information and consultation process)
• Employers are likely to benefit from helping trade union (or employee) representatives to maximise their contribution to the information and consultation process. (See Trade union and employee representatives)
• Consultation meetings between transferors and trade union (or employee) representatives are central to the consultation process during a transfer. The transferor should involve the transferee in the process and engage with employees directly. (See The information and consultation forum)
• Transferees should engage with their existing workforce prior to a transfer. (See Engaging with the transferee’s existing employees)
• Transferors are required to give transferees information about transferring employees. A transferee may benefit from seeking information that exceeds the basic requirements. (See Employee liability information)
• Following a transfer, the transferee may experience problems arising from managing two sets of employees and terms and conditions. If the transferee intends to dismiss employees in connection with the transfer, it should take precautions. The transferor should continue to engage with its remaining employees to sustain their morale following the departure of their colleagues. (See Managing employees following the transfer)

Overview

This section of the XpertHR good practice manual focuses on TUPE, which prescribes that, where a business or service transfers from one organisation to another, the employees assigned to it follow.

The section discusses how employers should deliver the commercial aims of a transfer without undue disruption to their business. It considers the business case for following good practice, the importance of the pre-transfer period in ensuring the success of the transfer, and meaningful engagement with employees before and after the transfer. It provides good practice advice for transferors (the employer that transfers its business or services to another employer) and transferees (the employer that takes on a business or service from another employer).

The importance of observing good practice when implementing a transfer

TUPE applies in a multitude of circumstances, and each transfer has unique commercial drivers, problems and opportunities. It is important for any employer embarking on a transfer to plan and prepare for the transfer, and observe good practice when implementing the transfer.

A failure to follow good practice during a transfer puts the transferor and transferee at risk of litigation, which can lead to liability for compensation and legal costs, and damage their reputation. Good practice goes beyond a checklist designed to comply with the legal requirements of TUPE. A failure meaningfully to engage with employees is likely to foster discontent and suspicion, resulting in a greater likelihood of claims for failure to inform and consult.

Each year, employment tribunals accept approximately 1,000 to 2,000 claims for failure to inform and consult on the transfer of an undertaking. The number of tribunal claims accepted each year is unlikely to reflect the actual number of employees entitled to compensation for a failure to inform and consult, as such a claim needs to be brought by trade union representatives (or employee representatives where no union is recognised) on their members’ behalf, but all of the affected employees are eligible to enforce the tribunal’s award, which can be up to 13 weeks’ gross pay. Other claims can arise in the context of a mismanaged transfer, for example a complaint of unfair dismissal.

To read the full XpertHR good practice guide on TUPE, follow this link…