When does TUPE apply?

‘Tis the Season TUPE Jolly 🎅

When employers consider outsourcing a business function—such as marketing—or bringing a service back in-house—like cleaning—one key area that is sometimes overlooked is whether these actions could trigger a TUPE situation.

The Transfer of Undertakings (Protection of Employment) Regulations 2006—more fondly known as TUPE—protects employees and their contractual terms, when there is a transfer of an undertaking or a service provision change (such as outsourcing, insourcing or changing provider).

Clients are often shocked to hear, that by cancelling an outsourced service, such as a contract with a cleaning company, they could potentially inherit an employee or two under TUPE as a Christmas gift 🎁 .

If the outsourced company’s employees are “wholly or mainly assigned” to cleaning the premises, and there remains a need for cleaning after the contract ends, TUPE may apply. If it did apply, the assigned employees would automatically transfer, with their existing terms and conditions protected under TUPE.

Similarly, when outsourcing a service like marketing, if TUPE applies, any employees assigned to those activities, would transfer to the new provider. Making staff redundant prior to the transfer, unless unrelated, would be deemed automatically unfair.

Both the old and new employer can be held jointly liable by tribunals for:

1️⃣ Unfair dismissal claims, where TUPE protections were not respected.
2️⃣ Failure to consult claims, which can result in awards of up to 13 weeks’ pay per affected employee.

TUPE is a complicated area of employment law, so organisations should always seek professional advice if they are uncertain as to whether TUPE applies or not.

 

 

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