TUPE refers to the “Transfer of Undertakings (protection of Employment) Regulations 2006” as amended by the “Collective Redundancies and transfer of undertakings (protection of employment) (Amendment) regulations 2014”. The TUPE rules apply to organisations of all sizes and protect employee’s rights when the organisation or service they work for transfers to a new employer.
Under TUPE an employee’s terms and conditions of employment are protected. There is nothing anyone can do to prevent TUPE applying (it is not possible to contract out of TUPE) there are steps which both the outgoing and incoming employers can take to divide up TUPE liabilities contractually between them.
Employees have certain employment rights when their employer changes as a result of a transfer of an undertaking. Generally when employees are moved to work in a new business following a buyout, this will ensure that employees are not disadvantaged when they employer.
TUPE can have impacts for the employer who is making the transfer (this is also known as the outgoing employer or the transferor) and the employer who is actually taking on the transfer (this can also be known as the incoming employer, the new employer or the transferee).
TUPE applies in two situations, business transfers and service provision transfers. If a business moves to a new owner or merges with another business to make a brand new employer the TUPE regulations will apply. In service provision transfers the TUPE regulations apply if a contractor takes over activities from a client (known as outsourcing), a new contractor takes over activities from another contractor (known as re tendering) or a client takes over activities from a contractor (known as in sourcing).