TUPE

Q. Our employer outsourced its IT department three years ago and gave the work to an external company. We want to bring it back in-house, but the company says that all the employees of the IT company will have to become employees of ours. Is this right?

A. Yes, it is possible that this could be a transfer under the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE), in which case the employees of the contractor would have to be taken over by your employer (unless they chose not to transfer).

It depends on whether the provision of the computer service is an "economic entity" in its own right. This is a complex area of law where there are a number of conflicting decisions, and you would need to get a legal opinion on the matter.

If a transfer under TUPE did take place, all the staff who were transferred into your company would stay on their existing terms and conditions. This could result in a two-tier system, unless you are able to negotiate that all employees are brought up to the same terms.