A brief guide to TUPE

Posted: 31st January 2012

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) were enacted to protect employees’ terms and conditions of employment in the event that the business they are working for is transferred from one owner to another.

The purpose of TUPE is to ensure that, when a business is transferred to a new owner and the identity of the employer changes, the employee’s terms and conditions of employment are not adversely affected and that the employee is treated as having entered into the original contract of employment with the new employer.

The law requires that a consultation with employees be carried out when a business is undergoing a change of ownership so that they are fully aware of their rights and of the protection afforded to them under TUPE.

Employees of businesses of all types and sizes are protected by TUPE (subject to some exceptions). TUPE applies where a company is bought out by another company and also where two companies merge together to form a ‘new’ third company.

There are some circumstances in which TUPE would not apply – for example, where a company is transferred to new ownership by way of a share transfer (in which case the employer remains unchanged), or where the transfer of a contract to provide goods or services does not involve the transfer of all or part of the business. TUPE also does not apply to transfers of business situated outside the UK.

As soon as employee representatives become aware of a possible transfer, they must endeavour to establish whether the TUPE regulations will apply to employees affected by the move.