Overview: What is TUPE?
TUPE (pronounced “two-pee”) is short for the Transfer of Undertakings (Protection of Employment) Regulations 2006.
TUPE comes from European law, and the 2006 Regulations are the UK’s implementing legislation. The original European law (the Acquired Rights Directive (Directive 2001/23/EC)) has the underlying purpose of protecting employees when one business buys another (business purchase, or asset transfer) in whole or in part. If one business buys another business, they are required to take on the employees of the business being purchased. The new business can’t buy all the assets and leave the old employees behind. The new business also cannot dismiss the new employees post-transfer if the sole and principal reason for the dismissal is the transfer itself (this wording was added by the 2014 TUPE amendment regulations – see our note on “TUPE Myths” for more information). However, both the old business and the new business can dismiss employees notwithstanding the transfer where there is an established Economical, Technical or Organisational (ETO) reason which entails a change in the workforce.
TUPE Protects Employees
The 2006 Regulations actually go further than the European law by also protecting employees where services are outsourced/insourced either for the first time or subsequent outsourcing/insourcing (service provision change). Based on similar principles, if a business has a group of employees who are specifically employed to provide a certain service to a client, the client can’t just take that service away and give it to someone else, and leave the old employees with no more work.
As you may have guessed from the title of this piece of legislation, TUPE is geared up to protect employees. As such, employers often approach “the T word” with caution and trepidation. It is true that TUPE is an extremely complex piece of legislation and often, there are no straight answers. However, understanding some of the key points from the outset can help to identify red flags early or else, establish that TUPE doesn’t apply at all.
This note is part of a series of notes on TUPE prepared by solicitors in our employment team. Please see the other notes for more information, or contact Claire, Rachael or Rebecca if you have any queries.