Transfers — the law

Basic legal rules

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) are intended to protect the rights of employees on the transfer of the business that employs them where that transfer results in a change in the employer’s identity. TUPE is likely to be triggered by business sales, mergers, inter-company reorganisations, outsourcing, “insourcing” (taking business back in-house) and changes in contractor.

• The regulations are designed to preserve the continuity of employment and contract terms of employees of the transferring organisation. TUPE also protects anyone who is dismissed because of the transfer immediately before it takes place. There are special rules about pensions.

• Important changes have been made to TUPE. These changes affect all transfers taking place on or after 31 January 2014. These changes reduce the protection that TUPE provides to employees. They make it easier and quicker for transferees to change terms and to carry out dismissals for transfer-related reasons. For more information about these changes, see LRD’s booklet, TUPE— a guide to using the law for union reps (www.lrdpublications.org.uk/publications.php?pub=BK&iss=1706), published in February 2014.

Key developments

• Post-transfer harmonisation of terms is an unlawful breach of the Acquired Rights Directive (Case 1).

• Contractual entitlements based on custom and practice will transfer under TUPE, even if they evolve as a result of a transferee’s mistaken belief that it is under a legal obligation at the transfer date (Case 2).