Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

The Transfer of Undertakings (Employment of Employment) Regulations 2006 (“TUPE”) provide employees with certain rights and protections when the business they are working for is acquired by another business. It implements the Acquired Rights Directive in England and Wales.

TUPE provides employees with four particular broad rights when a “relevant transfer” takes place. It also provides the transferee (the business which is purchasing the other business) with the right to be provided with certain information regarding the transferring employees. There are also specific regulations which apply when an insolvent business is being acquired.

This post will tackle the circumstances in which a “relevant transfer” takes place (and therefore the TUPE regulations ‘kick in’). This will involve an examination of the law but will also include the use of examples to illustrate and simplify the potentially complex law involved.

When does a “relevant transfer” take place?

A relevant transfer can take place if one of two circumstances occur:

  1. A business transfer takes place; or
  2. A service provision change takes place

Business transfer

To test whether a business transfer has taken place three fundamental questions must be asked:

  • Was the undertaking (the business) a stable economic entity prior to the transfer?
  • Was there a transfer?
  • Was the undertaking transferred in a recognisable form?

Was the undertaking (the business) a stable economic entity prior to the transfer?

This ultimately involves the question of whether the transferor was an ongoing economic enterprise at the time of the transfer. In order to determine whether an ongoing economic enterprise exists a number of factors are looked at (among others):

  • Was there a stable group of wage earners at the transferor?
  • Is the whole or part of the business being transferred?

There normally must be a stable group of wage earners present for there to be deemed an ongoing economic entity to exist. TUPE can apply to both whole businesses and parts of businesses – but whether it applies to parts of businesses depends on the type of business that is being transferred and the “framework” of the part of the business. TUPE doesn’t also necessarily have to apply to just private industry – it can also include non-commercial ventures: the NHS, local education or non-profit organisations.

Has the undertaking been transferred?

The courts will look at the particular facts of the case to determine whether a transfer has taken place. However, the transfer doesn’t have to take place in one transaction – it can take place over a number of transactions and doesn’t necessarily have to be proximate in time (i.e. it can take place over a long period of time).

Was the undertaking transferred in recognisable form?

Again, the courts will look at the facts of the particular case to determine whether the undertaking has been transferred in a recognisable form. The first question to ask is: does the business retain its identity? The greater the similarities between the business prior to and after the transfer, the more likely it will pass the test. For example, if a chocolate factory is converted to a nightclub after the transfer then it is probable that it will not be deemed to have transferred in recognisable form. Relevant factors which determine whether the business retains its identity include (among others):

  • The type of business or undertaking involved
  • Whether the transferor’s tangible assets (buildings, equipment etc.) have been transferred
  • The degree of similarity between activities carried out before and after the transfer

Service provision change

Services provision changes (or “contracting out”) can also be covered by TUPE if the majority of its employees are transferring, the intention of the parties is that the provision of services will transfer, and that the transferee has tendered on the basis that TUPE applies.  Should these three conditions apply then the normal rules related to above apply: has the business actually transferred?

Examples of service provision changes include, for example, the transfer of hospital cleaning services from one contractor to another or an educational college terminating a catering contract in order to provide its own services.

About

Redmans Employment Team deal with employment matters for both employers and employees, including drafting employment contracts and policies, advising employers and employees on compromise agreements, handling day-to-day HR issues, advising on restructures, and handling Employment Tribunal cases for both employers and employees Call 020 3397 3603 to speak to one of the members of our employment team or email us on enquiries@redmans.co.uk. Redmans have offices in Richmond, Chiswick, Hammersmith, Fulham, Kingston, Wimbledon, Ealing, Kings Cross and Marylebone (meetings strictly by appointment only).

Tagged with →  

Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

Share →

Leave a Reply

Your email address will not be published. Required fields are marked *

 

Our awards

Request a callback

    Your first name (required)

    Your last name (required)

    Your email (required)

    Your telephone number (required)

    Brief details of your enquiry

    Testimonials

    4.80 Average

    320 Reviews

    Anonymous

    Efficient and quick service!

    Posted 2 days ago

    Karen B

    Quick response very helpful Issue raised dealt with very quickly

    Posted 5 days ago

    Carmen T

    Redmans give Great service and advice on reading contracts. They can explain all the solicitors jargon into words that you can understand. I received excellent service an I will use them again and again.

    Posted 1 week ago

    Anonymous

    Very grateful for Mel’s efforts in handling my case from start to finish which I would have found very stressful without it. She was very professional, friendly and we had a positive outcome. Highly recommend.

    Posted 4 weeks ago

    Nalin W

    Mel Chin was my Legal Executive when I engaged the services of Redmans Solicitors to help with a redundancy matter. She was incredibly approachable and professional from start to finish. Specially I have to mention regarding prompt reply to all my email queries, It was super quick. I would thoroughly recommend Mel Chin. Many Thanks

    Posted 1 month ago

    Anonymous

    I'd highly recommend Redmans Solicitors. Mel was very helpful and assisted me throughout my case.

    Posted 1 month ago

    Anonymous

    Sacha was very thorough and very helpful, with great advice on when to act and when to wait on my case.

    Posted 1 month ago

    Anonymous

    I have been very pleased with the support I got from Redmans Solicitors on my case with my employer. Caroline has always helped me to put things in perspective and showed me different scenarios ultimately to help me taking the right decision. She was very professional and always available when I needed, and at the same time also emphatic which I found also really important to establish a strong relationship. Will definitely recommend!

    Posted 1 month ago

    Anonymous

    Prompt and efficient response to my enquiries. Excellent negotiating skills with my employer which considerably improved the terms of my settlement agreement.

    Posted 1 month ago

    Anonymous

    Very quick and professional service , Rana was very helpful

    Posted 1 month ago

    James G

    Very professional, knowledgeable and kept me informed at every stage of my case. I would highly recommend Redmans.

    Posted 2 months ago

    Pravina P

    Chris was really good and help solve my issues with current company. I would recommend him to anyone.

    Posted 2 months ago

    Paul L

    Sacha was extremely helpful in my matter. I would not hesitate you use Sacha or Redmonds again. Everyone was very helpful.

    Posted 2 months ago

    Monique N

    I had Mel Chin helping me with a settlement and she was very professional and reliable throughout my case. Mel provided me with a good understanding of what was happening and gave suggestions on routes I could take. My case was resolved and closed promptly although the opposing side were very difficult to deal with. A very big thank you to Mel and Chris.

    Posted 2 months ago

    Jackie C

    My first ever experience needing the services of a solicitor; cannot speak highly enough of Mel and Chris’s personable, reassuring and straight to the point advice in dealing with my settlement agreement. They put me at ease during an extremely stressful time. I am equally as happy with the outcome, as l am their professional services.

    Posted 2 months ago

    ""

    Really happy with the service. All very efficient. Mel rattled through things very fast, however was great whenever I needed to stop and ask a question! Would definitely return to Redmans if I ever needed Legal advice.

    Posted 2 months ago

    Peter F

    Very helpful and clear advice, would highly recommend.

    Posted 2 months ago

    William A

    Second time I have had to use Redmans. They did not disappoint. They are fast , efficient and friendly. I have already recommended them to friends and colleagues. I hope I dont have to use them again but if I have to , they are the solicitors for me.

    Posted 2 months ago

    Fleeta C

    Great service with tantastic communications. The solicitor responsible is extremely knowledgeable and was responsible for bringing a timely and desired solution.

    Posted 2 months ago

    Veronica M

    Extremely helpful, starting from a request for advice at very short notice, to dedicating time for me to understand and review all documents thoroughly.

    Posted 2 months ago

    Sophie R

    Very efficient and professional service. Chris was very empathetic, knowledgeable and personable. Highly recommended.

    Posted 2 months ago