TUPE and the automatic transfer principle – who transfers under TUPE?

In the latest of our series of posts on TUPE, we take a look one of the rights that employees receive if the business that they work for is acquired by another business. In a previous post we looked at the protection against unfair dismissal that employees receive. In this post we’ll look at the automatic transfer principle.

Where there is a relevant transfer (explored in this post) the transfer doesn’t end the employment relationship – it simply transfers to the business doing the acquiring. The contracts of employment of employees transfer to the transferee (the business doing the buying) on the same terms of contract as with their previous employer and with their continuity of service preserved.

In this post we’ll take a look at who transfers to the transferee upon a relevant transfer. In the next post we’ll take a look at what rights and liabilities are transferred from transferor (the business being bought) to the transferee.

Who transfers across when a relevant transfer occurs under TUPE?

Under TUPE employees who are employed, were employed immediately before the transfer, or would have been employed but for their being dismissed because of the transfer or a reason connected to it (which isn’t an ETO reason), who were assigned to the organised grouping of resources or employees that is subject to the relevant transfer, automatically transfer to the transferee.

How is employee defined under TUPE?

The following persons are transferred when a relevant transfer takes place:

1. Employees
2. Those persons who don’t have a contract of service but have an existing employment relationship with the transferor

Employee is defined in a wider context than usual under TUPE than it is for other purposes under employment law. It includes individuals who work for another person, whether under a contract of service or apprenticeship or otherwise. “Workers” (another category of employment relationship) would therefore normally fall under this definition and be transferred when a relevant transfer takes place. However, agency workers and self-employed workers would fall outside the TUPE provisions and not be transferred when a TUPE transfer takes place.

The second category – those persons who don’t have a contract of service but have an existing employment relationship with the transferor – is relatively ambiguous and can catch unsuspecting transferees out. Under this provision workers who do not have a contract of service with the transferor (such as staff providing catering or hygiene services at a workplace) can have their employment relationship transferred to the transferee.

Which employees are assigned to the organised group of resources or employees subject to the transfer?

This is a question of fact in any particular instance. The Employment Tribunal will look at all the facts of the case at hand and determine whether an employee or a group of employees were attached to a particular group of resources or employees that are subject to the relevant transfer. Issues that the Employment Tribunal will look at include length of service, permanence of attachment to a particular area of the business etc.

The next post will look at what rights and liabilities transfer to the transferee upon a relevant transfer.