TUPE Transfer Checklist: Understanding the process

When a business changes owner, then its employees might be protected under the Transfer of Undertakings (Protection of Employment) regulations, otherwise known as TUPE. If you’ve found that you are facing a TUPE, then it’s important to recognise that this is a highly complex and technical transfer process and whether you are the outgoing employer or an incoming employer, then there are several essential steps that you need to follow to make sure you remain compliant and avoid any employment tribunal claims.

Remember, a TUPE transfer can be a very unsettling time for all employees involved, which is why the process needs to be handled carefully. Here we look at what TUPE is, together with a transfer checklist, to help you best understand the process, whether you’re an outgoing or incoming employer.

What is a TUPE transfer?

As we’ve already established, TUPE stands for Transfer of Undertakings (Protection of Employment). And, as we’ve mentioned TUPE happens when either:

• An organisation, or part of it, is transferred from one employer to another
• A service is transferred to a new provider, for example, cleaning, catering or security services

If you’re going through the process, it’s important that you remember:

• All rights, obligations and liabilities in relation to the transferring employees automatically transfers to the incoming employer
• The transfer should not be to the disadvantage of the employee

TUPE transfer list

It’s vital that the incoming employer – or transferee – and the outgoing employer – or transferor – work together, to ensure the employee is not at a disadvantage throughout the TUPE transfer process.  This exercise is usually referred to as the due diligence process.

For this to happen, the below steps should be followed:

1. The outgoing employer should identify which employees will transfer to the incoming employer (this will depend on whether you’re selling all or part of your business). The incoming employer then needs to obtain this information, which will also determine whether any of your current employees will be impacted by the transfer
2. The incoming employer should then obtain ‘employer liability information’ – this must be provided to you by the outgoing employer at least 28 days before the transfer takes place or whenever reasonably practicable. The employer liability information tends to include:

• • The name and ages of employees being transferred
  • Information in their employment contracts in relation to their pay, hours of work, benefits, holidays and length of service
  • Information about any relevant collective agreements
  • Any disciplinary action that was taken against the employee in the last two years
  • Any employee grievances raised in the last two years
  • Any legal action brought against the employer by an employee in the last two years, as well as any potential legal action

1. Any ‘measures’ should then be discussed between incoming and outgoing employers. Measures are ‘changes’ that the incoming employer might want to make following the transfer, for example, any potential redundancies. As an incoming employer, you can only make changes if they fall under an Economic, Technical and Organisation (ETO) reason:

• • Economic: to do with how the company is performing or in relation to external factors
  • Technical: to do with the equipment or processes used by the company
  • Organisational: to do with the structure of the company

Note, the outgoing employer requires this information so they can consult employee representatives and/or unions

1. The outgoing employer should then inform affected employees – providing them with any information on why the transfer is taking place, potential implications it might have on affected employees and measures that will be taken by the incoming employer
2. The incoming employer should then meet with transferring employees
3. The incoming employer needs to then identify any additional contractual benefits that will be provided to employees following the transfer, for example, private medical insurance, and or increases pension contributions
4. Finally, the incoming employer should write to transferring employees detailing their new employment and including critical information such as any changes to pay dates etc for documentation purposes.

What happens if you don’t inform and consult employees?

It’s vital that you recognise that failing to inform and consult employees (either as an incoming or outgoing employer) during the TUPE process, might result in legal action being taken. Each employee who is not informed or consulted about the transfer could potentially claim up to 13 weeks of gross uncapped pay, which could result in unnecessary costs for both incoming and outgoing employers.

Do you need professional HR support and advice?

At NESE HR we are here to support you and your business through the TUPE transfer process, helping you to avoid any potential problems, or costly tribunal claims, as well as other unnecessary financial costs.

Get expert HR advice today from the experts at NESE HR. Contact us today.