Something we covered briefly in our beginner’s guides a few weeks ago but wanted to look into in more detail is TUPE, which stands for ‘Transfer of Undertakings (Protection of Employment)’, and is a UK employment law that was brought into place in 2006.
When introduced, the law was intended to protect employees working for organisations that were being transferred to another business, as an update to legislation that was originally in force from 1981. Although the regulation is intended to help employees and their employers, business leaders have sometimes found the regulation confusing and hard to implement.
The legislation itself has 3 main aims, which are:
These TUPE rule don’t apply when a company’s shares are sold, however they do apply when the physical assets and leases of a company change hands, and sometimes when work is given over to contractors (which falls under the ‘service provision changes’ section of the legislation.
One area in which there is some concern over the implementation of this legislation is when it comes to professional services firms such as solicitors or accountants. According to an expert on the law, Dr John McCullen:
“If you had an organised grouping of solicitors at a law firm devoted to one client, and that client said ‘I do not want this law firm, I will appoint law firm X’, then TUPE 2006 could apply so that—contrary to what the client is expecting or wanting—it may find that the lawyers would have the right to turn up at the newly appointed law firm. The definition of ‘organised group’ can be just one person.”
There is also an issue with employees who might not want to transfer to the new company. Usually they might be able to claim redundancy from their old employer as their post will no longer be in existence, however under TUPE laws they would have no choice but to either accept a post at the new company or resign.