The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) are designed to safeguard the terms and conditions of employees who transfer to new employers when a business is sold or when ownership of a business changes. Not only does this mean that, in the vast majority of cases, employees cannot be dismissed when a business is bought or sold, it also means that employers cannot change the transferred employees’ terms and conditions to match those of its existing employees.

Complying with the TUPE regulations can be difficult, and any company that is about to undergo a change of ownership should always seek expert advice well in advance of making a transfer.

In brief, TUPE applies when:

• A stable economic entity is transferred from one business to another; and
• That entity retains its identity after the transfer.

What this means in layman’s terms is that the regulations apply when a business transfers ownership and remains the same business albeit with different owners. This includes situations in which there is a simple change in the providers of a service, such as when a service is out-sourced, in-sourced, or when service contracts are transferred.

However, TUPE does not apply in the following situations:

• When a company’s shares are bought by new shareholders and there is no transfer of the business, with the same company continuing to be the employer.
• When a business transfers its assets only.
• When a business changes its identity radically, either in the nature of the work it does or in its organisational structure.

While TUPE only relates to changes of ownership that occur within the UK, many other countries in the European Union have similar provisions in law designed to protect the rights of workers during a transfer of undertakings.

In the event of a dispute, matters will ultimately be settled by tribunals and in court, which can be time-consuming and costly for all involved. The best way to avoid such disputes is to seek professional legal advice from the outset and ensure that your company acts in compliance with the regulations.

Ashby Cohen are specialist employment law solicitors who have many years of experience in advising companies on the intricacies of TUPE law, so no matter what your situation is, we can help. Contact us today for a free initial telephone consultation to discuss your circumstances.

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