Are you transferring your business assets to another business? What about your staff? This blog explores your Regulatory requirements for staff transfers.
The TUPE Regulations apply if a business or part of a business moves to a new owner or merges with another business to make a brand new employer. Under the TUPE regulations, a business is not judged by its name but by the use made of its assets such as the: premises, equipment, work in progress, goodwill (such as the value of a brand name or a customer base) intellectual property and employees. TUPE ensures a continuity of employment for all staff by maintaining the same terms and condition provided by the previous employer.
Which employment rights, obligations and liabilities transfer to the new/incoming employer?
- contracts of employment (T&C, pay, job title, sick pay provisions)
- accrued entitlements (bonuses, holidays)
- liabilities for outgoing employers act and omissions
- continuity of services
Prior to transferring your staff you need to do the following (as the outgoing employer):
Inform and Consult Employee
- Set up a clear channel of communication so employees, Trade Union representatives and the elected employee’s representative can ask questions.
- Arrange for the election of employee representative and offer training for the rep (if there is no Trade Union/Elected Rep in existence).
- Continue to regularly update staff with progress.
What information you must provide to your employees?
- The fact a transfer will be taking place, when and why.
- Any social, legal or economic , implications affecting employees (including any risk of redundancy)
- If there are plans by the incoming employers to make changes to employment arrangements after the transfer, under the TUPE regulations these are called “measures”. Employers must consult about any measures they are thinking about or intend taking as a result of the transfer. Measures can include: redundancies, workplace relocation, changes to staff pay dates, different working patterns, and different pension arrangements.
Warning: Failure to inform/consult can be expensive for employers: Either or both employers can be liable for compensation of up to 13 weeks gross uncapped pay for EACH employee affected by the transfer based on the seriousness of breach.. This applies even if only one employee or their representative brings a claim.
Provide the ‘Employee Liability Information’ (ELI) at least 28 days before the transfer date. Under TUPE regulations the following employee liability information must be provided: identities of the transferring employees
- age of the transferring employees
- employment particulars of the transferring employees
- active/live disciplinary and grievance records from the last two years of the transferring employees
- any collective agreements which are in force any outstanding claims the transferring employees have against the outgoing employer.
WARNING! The ELI must be accurate, up-to-date and secure, and must be provided not less than 28 days before the transfer. If the ELI is not provided within this time, the incoming employer may apply to an employment tribunal for compensation which starts at a minimum of £500 for each employee for whom the information was not provided or was incorrect.
For a guide to handling TUPE transfers, ACAS had an exceptionally thorough booklet located at the following link:
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