TUPE “Transfer of Undertakings" guidance for employees
This article is based upon the TUPE - Transfer of Undertakings (protection of employment) Regulations 1981. Changes that were to be effective from October 2005 will now be effective from 6 April 2006.
This article is one of two. This is specifically for employees; the second is specifically for employers. The law of course, is the same; however, the article for employers, deals with how it affects their transfer, as well as actions employers should take. This article concentrates on employee’s rights and how to resolve any issues arising from a transfer of undertaking.
What is TUPE?
TUPE – Transfer of Undertakings (protection of Employment) Regulations preserve employees' terms and conditions when a business, undertaking, or part of one, is transferred to a new employer.
How does this affect me?
When the undertaking changes hands, you will immediately become an employee of the new employer. It will be as if you had agreed your contract with the new owner. You will have all the same terms and conditions. Your continuity of employment is preserved, as are your terms and conditions of employment under your contract of employment (except for certain occupational pension rights – more on this later);
You have a right to be informed about the transfer. You must also be consulted about anything different which the old or new employer envisages taking which will affect you.
What the law states
The new employer takes over the contracts of employment of all employees who were employed in the undertaking immediately before the transfer. An employer cannot choose some employees, and not others;
The new employer takes over all rights and obligations arising from those contracts of employment, except criminal liabilities and rights and obligations relating to provisions about benefits for old age, invalidity or survivors in employees' occupational pension schemes;
You cannot be dismissed by either employers because of the transfer or a reason connected with it, unless the reason for the dismissal is an economic, technical or organisational reason entailing changes in the workforce;
Your terms and conditions of employment cannot be made worse by the change, unless it states so in your employment contract;
You must be informed and consulted by your representative(s) of the changes;
If you have been unfairly dismissed because of a transfer, you have the right to complain to an employment tribunal;
If your conditions of work have been worsened by the transfer, you have the right to terminate your contract and claim unfair dismissal on the grounds that actions of the employer have forced you to resign. You cannot make this type of claim solely on the grounds that the identity of their employer has changed unless that change is significant and to your detriment;
Employees employed in the undertaking immediately before the transfer for a reason connected with the transfer automatically become employees of the new employer, unless they inform either the new or the previous employer that they object to being transferred. In this case the contract of employment with the previous employer is terminated by the transfer of undertaking but the employee is not dismissed. The previous employer may re-engage the employee;
An employee's period of continuous employment is not broken by a transfer;
Occupational pension rights earned up to the time of the transfer are protected by social security legislation and pension trust arrangements.
Redundancy
Dismissed employees may be entitled to redundancy payments. Employers must also ensure that the required period for consultation with employees' representatives is allowed.
Entitlement to redundancy payments will not be affected by the failure of any claim which an employee may make for unfair dismissal compensation.
Where there are redundancies and it is unclear whether the Regulations apply, it will also be unclear whether the previous or the new employer is responsible for making redundancy payments. In such cases employees should consider whether to make any claims against both employers.
What should you know?
If you are a member of a trade union, your representative, should tell you the following. If you are not represented by a union, another representative will be chosen for you. You should be told:
When and why the transfer is going to take place;
The legal, economic and social implications of the transfer for you;
Whether the employer envisages taking any action (reorganisation for example) and if so, what action is envisaged?
Can I be dismissed because of the transfer?
Your new employer cannot dismiss you upon transfer, unless the main cause of dismissal is a carefully defined “economic, technical or organisational” reason, which requires changes to the workforce and that they are acting “reasonably” in treating that reason as sufficient to justify a dismissal. If your new employer does dismiss you for one of these reasons, they must pay you redundancy compensation at the same level as your original redundancy terms. You can still claim for unfair dismissal against your new employer, if you believe that you have not been treated fairly.
Can I claim for unfair dismissal?
If your new employer does not provide comparable overall terms and conditions of service, including pension arrangements, you would have a claim for unfair dismissal.
Complaining to an employment tribunal
You may complain to an employment tribunal if:
You have been dismissed or have resigned in circumstances in which you consider you were entitled to resign because of the consequences of the transfer;
You must complain within three months of the date of ending your employment;
It may be unclear whether claims should be made against the previous or the new employer. In such cases, you should consider whether to claim against both employers;
You are an affected employee where the employer has not complied with the information or consultation requirements other than in relation to a recognised trade union or an elected representative. A complaint must be made within three months of the date of the transfer.
What happens next - Conciliation?
The tribunal will send a copy of the completed form to a conciliator of the Advisory, Conciliation and Arbitration Service (ACAS), who will try to promote a settlement of the complaint without a tribunal hearing.
The services of a conciliator will also be available in the absence of a formal complaint, if either you or your employer requests them. In such a case you or your employer can get in touch with a conciliator through an office of ACAS.
Tribunal hearing and awards
If no settlement is reached, the employment tribunal will hear the case. If complaints are upheld, awards may be made against the previous or new employer, depending on the circumstances of the transfer:
Unfair dismissal awards - Employment tribunals may order reinstatement or re-engagement of the dismissed employee if the complaint is upheld, and/or make an award of compensation;
Detriment awards - The employer may be ordered to pay compensation to the person(s) concerned;
Information and consultation awards - The employer who is at fault may be ordered to pay compensation to each affected employee, up to 13 weeks' pay. If employees are not paid the compensation, they may present individual complaints to the tribunal, which may order payment of the amount due to them.
If by chance you find some error of law or fact in any Net Lawman information page, do please tell us. We should also welcome your suggestions for new subjects for information pages. These notes:
Do not provide a complete or authoritative statement of the law;
Do not constitute legal advice by Net Lawman;
Do not create a contractual relationship;
Do not form part of any other advice, whether paid or free.
