TUPE: when does it apply and why does it matter? TLT Annual Commercial Leases Seminar
•Download as PPT, PDF•
3 likes•971 views
TUPE refers to the Transfer of Undertakings (Protection of Employment) Regulations 2006, which apply the Acquired Rights Directive 2001 and automatically transfer employees and associated liabilities from a seller or outgoing contractor to a buyer or incoming contractor. TUPE applies to business transfers where an economic entity retains its identity, and to service provision changes involving contracting in or out of services. It can apply at various points for entities involved in a commercial lease, such as when entering or assigning a lease, or ending a lease through expiry, surrender or forfeiture. TUPE protects transferred employees from dismissal unless there is an economic, technical or organizational reason involving changes to the workforce. Entities must inform and consult employees in a timely manner, and
Recommended
More Related Content
Similar to TUPE: when does it apply and why does it matter? TLT Annual Commercial Leases Seminar
Similar to TUPE: when does it apply and why does it matter? TLT Annual Commercial Leases Seminar (20)
More from TLT LLP
More from TLT LLP (6)
Recently uploaded
Recently uploaded (20)
TUPE: when does it apply and why does it matter? TLT Annual Commercial Leases Seminar
- 1. TLT LLPTLT LLPTLT LLPTLT LLPTLT LLPTLT LLP TUPE When does it apply and why does it matter? 18116719.1 TLT Annual Commercial Leases Seminar 2015
- 2. TLT LLP What is TUPE? Transfer of Undertakings (Protection of Employment) Regulations 2006 • applies Acquired Rights Directive 2001 • intervenes to transfer employees (and associated liabilities) from seller / outgoing contractor to buyer / incoming contractor • automatic – no agreement required
- 3. TLT LLPTLT LLPTLT LLP TLT LLP When does TUPE apply? • Business transfer – transfer of an economic entity which retains its identify • Service provision change – contracting in/out and subcontracting
- 4. TLT LLPTLT LLPTLT LLP TLT LLP Points at which TUPE could apply • Entering into a lease • Contracting services under the lease while tenant • Providing/contracting services as landlord • End of the lease • end of term • surrender • forfeiture • Assignment of lease • Sale of freehold reversion
- 5. TLT LLPTLT LLPTLT LLP TLT LLP Business Transfer • TUPE may apply: 1. Is there a economic entity? 2. Will the undertaking retain its identity? 3. Who are the employees employed by? 4. Are the employees assigned to the transferring business?
- 6. TLT LLPTLT LLPTLT LLP TLT LLP TUPE Test • Could TUPE apply in these situations where you are acquiring the lease of a local pub: • You intend to change the business and operate the site as a restaurant. • You will operate as a pub, but only after significant renovations which will take 6 weeks. • The site is currently vacant with only a security guard supplied by a contractor.
- 7. TLT LLPTLT LLPTLT LLP TLT LLP Service Provision Change • Contracting of services under a lease or the operator bringing the services back 'in house' TUPE may apply
- 8. TLT LLPTLT LLPTLT LLP TLT LLP Service Provision Change Example Operator of 10 local pubs TUPE: takes service back in house TUPE: Changes provider to Sparkle and Shine Limited TUPE: Outsources cleaning services to Clean Bees Limited
- 9. TLT LLPTLT LLPTLT LLP TLT LLP Service Provision Change • Immediately before the transfer there must be: • An organised grouping of employees • Whose principal purpose is the carrying out of the activities on behalf of the client • Exceptions: • Single event/ task of short term duration • Contract for the supply of goods
- 10. TLT LLPTLT LLPTLT LLP TLT LLP What transfers…? • Contractual rights – T&Cs • Acts and omissions before the transfer • Accrued liabilities • Collective agreements
- 11. TLT LLPTLT LLPTLT LLP TLT LLP Protection Against Dismissal • You take over a lease of a restaurant employing 20 staff. The business model is to increase profit by reducing staff by 50%. Does TUPE prevent you doing this? • Employees protected against dismissal unless ETO reason: • Economic/technical/organisational reason entailing changes in the workforce • You would prefer the outgoing employer to terminate the staff. Are there any risks?
- 12. TLT LLPTLT LLPTLT LLP TLT LLP Informing and Consulting – Managing the Process • "In good time" • What information has to be given? • Fact of transfer/ date and reasons for it • Legal/ economic and social implications • Measures • Info on agency workers
- 13. TLT LLPTLT LLPTLT LLP TLT LLP Failure to Inform and Consult • A tenant of a pub employs 10 employees. The tenant cannot pay its rent so the landlord forfeits the lease. Landlord starts to run the pub itself whilst looking for a new tenant. • What are the TUPE implications?
- 14. TLT LLPTLT LLPTLT LLP TLT LLP Disclosure of Employee Liability Information • ELI must be given at least 28 days before the transfer date • Can't contract out of the obligation • Minimum compensation of £500 per employee
- 15. TLT LLPTLT LLPTLT LLPTLT LLPTLT LLPTLT LLP Any questions?