The terms and conditions of employees who transfer in a sale of a business are preserved under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). So you can’t just to tell employees to pee off when all or part of a business is bought or sold. Just to pee (bored of the joke yet?) you off further in the vast majority of cases a new employer cannot change the transferred employees’ terms and conditions to match those of its existing employees.
It is easy to fall foul of these minefield regulations without expert help, but here we provide an overview.
The terms and conditions of employees are also maintained where there is a simple change in the providers of services, for example when outsourcing e.g. security guards, in-sourcing e.g. catering and transferring service contracts e.g. cleaners.
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applies when a stable economic entity is transferred from one business to another and that entity retains its identity after the transfer, in legalese. In laymanÃ¢ÂÂs terms that means roughly speaking when a business transfers ownership and remains the same business but with different owners.
TUPE does not therefore apply when a company’s shares are sold to new shareholders and there is no transfer of the business, with the same company continuing to be the employer or when a business transfers its assets only or where there is a change of business identity where the work or organisational structure changes radically. If there is a transfer of undertakings outside the UK, TUPE obviously does not apply however there are similar provisions in the European Union.
In a nutshell, the eventual deciders in the event of a dispute will be tribunals and court. And no-one wants that, so it goes without saying, make sure you don’t leave grounds for dispute. It also goes without saying that Lawdit can help you out.