Last month’s Resource included TUPE or Not TUPE? Part 1, in which we gave an overview as to what TUPE is and the obligations for the employer whose staff are transferring.
This month it’s Part 2, where we turn our attention to the incoming employer in a TUPE transfer and their obligations.
a lot of overlap between the obligations for the incoming employer and
those for the outgoing employer. Regardless of which side of a transfer
you’re on, it’s important to be aware of both parties’ obligations.
is a complex and challenging area of employment law. If you’re going
through or anticipate going through a TUPE process, then it’s really
important to obtain expert guidance, as minor things that could be
overlooked could have major implications in terms of time, money and day
to day logistics.
Previously on TUPE or Not TUPE?...
Last month we considered in some depth what TUPE is and the impact it has for the employer whose staff are transferring.
way of background, TUPE is legislation that aims to ensure that
employees are not adversely affected by a change in ownership of the
business in which they work. It applies, for example, if a company sells
its business to another company.
For a more detailed explanation, please take a look at Part 1.
Obligations on the incoming employer
The incoming employer is the individual or organisation acquiring the business in which the employees work.
is to the incoming employer that the employment of those employees will
automatically transfer to, when the transfer of the business takes
Previously we discussed the requirement on the outgoing employer to supply employee liability information.
is information which has to be supplied to the incoming employer in
advance of the transfer and which provides details about the
Once the incoming employer has received
this information, this will help them decide what (if any) changes they
wish to make regarding the transferring employees.
employer may have plans to make changes to employment arrangements after
the transfer and under the TUPE Regulations these are called
“measures”. Measures can include:
- workplace relocation;
- changes to staff pay dates;
- different working patterns;
- different pension arrangements.
considering what measures should be made, it’s important to note that
the TUPE Regulations are very strict about the limits on what can be
The circumstances in which changes can safely and validly be
made to the terms of the employees’ contracts of employment, for
example, are very limited.
Once the measures have been decided,
the outgoing employer has an obligation to inform trade union or elected
staff representatives about the measures the incoming employer is
likely to make Therefore the incoming employer must provide the outgoing
employer with information about any measures it envisages taking in
relation to the transferring employees.
All proposals, however
trivial should be notified to the outgoing employer and, through them,
to the transferring employees’ representatives and if there are to be no
changes, then that too must be notified.
There is no timescale
for providing this information, but there needs to be sufficient time
given to allow the outgoing employer properly to consult with the staff
Duty to inform and consult
Under the TUPE Regulations, the obligation on an employer to consult is only in respect of that employer’s own employees.
details about the obligation to inform and consult are considered in
Part 1, and the incoming employer should follow a similar procedure.
incoming employer also has an obligation to inform trade union or
elected representatives of its own affected staff about the transfer.
This enables those members of staff to understand what is happening and
why, including any changes that the incoming employer envisages making.
the incoming employer is proposing to take any measures which will
affect its own employees, then it also has an obligation to consult with
those employees’ representatives about those measures.
the incoming employer is under no obligation to consult the transferring
employees or their representatives prior to the transfer.
Failure to comply
the point of transfer, the incoming employer effectively steps into the
outgoing employer’s shoes with regard to the transferring employees.
means that all rights, powers, duties and liabilities pass to the new
employer and any acts or omissions carried out by the outgoing employer
before the transfer are treated as having been done by the incoming
employer. Therefore it’s important for the incoming employer to consider
carefully the employee liability information supplied prior to the
transfer, as failure to do so could lead to unwanted liability and cost.
an employer fails to comply with the obligations to inform and consult,
then the Employment Tribunal can award each affected employee
compensation equivalent to up to 13 weeks’ uncapped pay. It’s also
important to note that liability for this award is ‘joint and several’.
This means that if the outgoing employer fails to comply with its
obligations to inform and consult and a Tribunal award is made, both the
incoming and the outgoing employer would be responsible for paying that
The incoming employer also needs
to be aware that if an employee is dismissed by them and the reason for
that dismissal is the fact that their employment has transferred, then
(apart from in very limited circumstances) if that employee has two
years or more employment, their dismissal will be automatically unfair
and the employee will be able to bring an Employment Tribunal claim
against the incoming employer.
With regard to length of
employment, it’s important also to remember that the period of
employment with the outgoing employer counts as employment with the new
For further information
For further information and advice about TUPE (and any other employment or HR matter), please get in touch with our Employment law and HR Team.