What you need to know about TUPE.

1. Tackling TUPE
Human Resource
Management
Change Management Organisation Development
Sheena Tooke
LL.M, MBA, FCIPD, FCMI, CMGR

2. What is TUPE
TUPE is an acronym for the "Transfer of Undertakings (Protection of Employment)
Regulations 2006
Purpose: to protect employees if the
business in which they are employed
changes hands
Effect: to move employees and any
liabilities associated with them from
The old employer to the new employer
by operation of law
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3. The Transfer of Undertakings
provide that upon a relevant
transfer of an undertaking or a
part of an undertaking, the
following legal consequences
apply:
2
All employees who were employed in
the undertaking immediately before the
transfer automatically transfer from the
old employer (the transferor) to the new
employer (the transferee).
An employer cannot just pick and
choose which employees to take on.

4. Which transfers does TUPE apply to
Merger
Sales of businesses
by sale of assets
Change of licensee or
franchisee
Gift of business
through execution of a
will
Contracting out of
services
Changing contractors
Where all or part of a
sole trader’s
business/partnership
is sold or otherwise
transferred
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5. Liability for personal
injury claims against the
transferor
Liability for age, sex,
sexual orientation, race,
religion and disability
discrimination claims
against the transferor
Liabilities for any
breach of contract e.g.
arrears of commission
payments or salary
All statutory rights and
liabilities, for
example unfair
dismissal claims
Any equivalent to
profit shares of a cash
payment or award of
shares
Unequal pay claims.
The transferee inherits
all civil liabilities and
obligations.

6. 7
How does an
employer tell
if TUPE
applies For example, where a company (or part of one) is
bought by another company which buys the
assets and then runs the business. Another
common example is a contract to provide services
which is transferred in certain circumstances to a
new employer.
In most cases it will be obvious that TUPE applies:
TUPE will almost certainly apply when an
undertaking (or part of one) is transferred from
one employer to another.

7. How does an employer tell if TUPE applies
There are a number of guidelines for an employer to take account when forming an
overall assessment of whether TUPE applies. These include considering:
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Whether tangible
assets such as
buildings,
equipment and
stock have
transferred
Whether
intangible assets
such as
intellectual
property rights
have transferred
Whether
employees in
terms of numbers
and skill pool have
transferred
Whether
customers or
clients have
transferred
Whether business
contracts have
transferred

8. Where TUPE
doesn’t apply
Transfers by share take over
Transfers of assets only
Supply of goods for a client’s use
Transfers outside of the UK
Transfers of a contract to provide goods or services
where this does not involve the transfer of a
business/part of a business
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9. 9
In most cases
it will be
obvious that
TUPE applies,
in some case
it is NOT so
obvious
This is known as Fragmented.
Does TUPE apply if after a service provision change the
service is now supplied by two (or more) service providers?
Yes, TUPE does apply when the service is supplied by two (or
more) service providers after a service provision change.
But if the activity have become so fragmented following the
service provision change that no relevant transfer took place
and TUPE could not operate.
In other words where a contract transferred from one
contractor to several, but that in some circumstances the
service so fragmented after a transfer that TUPE cannot apply.

10. 10The more fragmented an activity is and the greater
the number of contractor’s post-transfer, the more
likely that TUPE will not apply to the incoming
contractors.
The best way to tell whether an employee is
assigned to the activities after a service provision
change, will depend upon establishing a link
between the employee and the work performed,
including the amount of time spent on the work.
The terms of the employment contract showing
what the employee could be required to do and
how the cost of the employee's service has been
allocated between the different parts of the
business would also be relevant.

11. TUPE
Service Provision Change

12. Service Provision Change
The relevant questions to ask when
considering whether there has been a
relevant transfer are:
• Has there been a transfer of an economic
entity that retains its identity (a business
transfer) or
• Is there a service provision change.

13. A service provision change occurs when a client who engages a contractor to
do work on its behalf is either:
reassigning such a contract, or bringing the work 'in-house’ (a service provision change).
It will not be a service provision change if:
the contract is wholly or mainly for the supply
of goods for the client’s use, or the activities are carried
out in connection with a single specific event or a
task of short-term duration.
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14. 14
Service provision changes currently arise between contractors and the
clients who hire their services. The changes to these contractual
arrangements can either involve:
to contracting in or outsourcing
where a service previously undertaken by the
client is awarded to a contractor for the first
time
re-tendering situations
where a contract is assigned to a new
contractor on subsequent occasions
to contracting out or outsourcing
where a contract ends with the service being
performed in-house by the client themselves.

15. TUPE
Changing the Workforce

16. 1. Negotiate warranties and indemnities. A
variety of warranties and indemnities can be
negotiated during the ‘TUPE Measures’
agreement between both parties.
2. Determine whether there is an economical,
technical or organisational (ETO) reason for
any proposed dismissals or variations to terms
and conditions.
17Two main ways the parties can prepare for the
impact of TUPE

17. ORGANISATIOANL
REASONS
2
ECONOMICAL REASONS
1
TECHNICAL REASONS
3
Where the transferee
wishes to use new
technology and the
staff employed by the
transferor in the
entity do not have
the requisite skills.
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What is the ETO defence under TUPE
Where the demand for output
has fallen to such an extent that
profitability of the entity is
unsustainable without dismissing
staff.
Where the transferee
operates at a different
location and it is not
practical to transfer staff.

18. 21
Many employers who are seeking to justify the dismissal of employees or to
harmonise terms and conditions simply focus on justifying their actions by seeking to
establish one of the ETO reasons.
Change the job
functions performed
by the employees or
19Changes in the workforce
So it is crucial that the ETO
reason must entail changes in
the
workforce.
Change the number of
employees making up the
workforce redundancies.

19. All collective agreements made with recognised trade unions and any recognition
agreements will also transfer.
Employees may object to the transfer or resign and claim unfair dismissal, if the transfer involves a
substantial change in their working conditions to their material detriment.
 Employees can resign and claim constructive dismissal where there is a repudiatory breach of their contract.
 The new employer may not unilaterally worsen the terms and conditions of employment of any transferred employee.
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20. Thank You
Sheena Tooke
LL.M, MBA, FCIPD, FCMI, CMGR