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 their 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 were made to TUPE in January 2014, reducing the protection that TUPE provides to employees. They made it easier and quicker for transferees to change terms and to carry out dismissals for transfer-related reasons.

TUPE – key development

•  All variations to contract terms made because of a transfer, both beneficial and harmful, are void unless there is an economic, technical or organisational reason for the variation entailing changes in the workforce (case 1).