TUPE is when a business is taken over, or radically changed. To protect employees, there are a number of guidelines that must be followed.
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TUPE applies when an undertaking, or part of it, is transferred from one employer (no matter what the size) to another where:
1. All or part of a sole trader’s business or partnership is sold or transferred
2. A company, or part of it, is bought or acquired by another
3. Two companies cease to exist and combine to form a third or
4. A contract to provide goods or services is transferred in circumstances which amount to the transfer of a business or undertaking to a new employer.
When a business is transferred to a new owner, the employees are entitled to certain rights. The regulations apply when there is a change in the employer and there must be a relevant transfer. This covered business transfers and service provision changes.
Once a relevant transfer has been proven, there a process that must be followed. There must be an automatic transfer of contracts of employment. TUPE protects employee’s terms and conditions of employment if a business is transferred from one owner to another. Employees of the previous owner, automatically become employees of the new employer on the same terms and conditions.
An employee can object to the transfer of their employment contract. If this is done, then their employment is treated as terminated by operation of law and there is no dismissal.
If an employee is dismissed with the sole reason being the transfer or a reason connected to a transfer that is not an economic, technical or organisation reason then the dismissal is automatically unfair.
There is a duty on both the original employer and new employer to consult with employees. This can either be elected employee representatives or representatives of a trade union. The obligation rises whenever a relevant transfer is planned. The employer must inform the representatives of:
– The fact that a transfer is taking place
– When it is approximately taking place
– The reasons for it taking place
-The legal, economic and social implications of the transfer
– The measures that will be taken for the employees.