Rights if your employment is transferred to another employer (TUPE)

Under various pieces of legislation, notably:

• EC Directive (European Directive) 77/187 (known as the Acquired Rights Directive),

• the bringing into British national law of this Directive under the Transfer of Undertakings (Protection of Employment) Regulations 1981 known as 'TUPE'

• Trade Union Reform and Employment Rights Act 1993

• Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1999

there is a limited degree of protection provided to employees in the event of a transfer of functions.

The regulations governing the transfer of undertakings have three main aims. These are:

• protection of employment rights;
• obliging employers to consult over transfers;
• protecting employees against dismissal.

Protection of employment rights

In the event of a transfer of undertakings many employment rights are automatically transferred to the new employer. These include:

• terms and conditions of employment;
• claims regarding pay arrears;
• outstanding legal claims;
• personal injury claims;
• disciplinary records;
• contractual requirements governing confidentiality, patents, etc.

However, certain matters do not automatically transfer including:

• pension rights and benefits;
• the previous employer's criminal liability.

To complicate matters further only certain types of transfer are covered including:

• sale of a business which is:

• a transfer can include:

• the transfer can be effected in two stages with a lease going back to the lessor and then to the new lease holder.

Transfers not covered include:

• a sale of assets only;
• a take-over by share acquisition;
• a hiving off of profitable sections of a company in liquidation
• employees working outside the UK.

If a transfer is covered by the regulations then the employer is obliged to consult recognised unions (or employee representatives if there is no recognised union) if there are any measures proposed and in any event to inform representatives in writing of:

• the fact that the transfer is taking place, its approximate timing and the reasons;
• the legal, economic and social implications for affected employees;
• measures to be taken in relation to employees.

As with redundancy, the union's representations must be considered and the employer must respond to them. If there is a failure to consult then a union can complain to an Employment Tribunal. The Tribunal has the power to award up to 13 weeks pay to every affected employee as compensation.

Employees dismissed either before or after the relevant transfer have an automatic right to pursue an unfair dismissal case unless the dismissal is for 'economic, technical or organisational reasons' which involve changes in the workforce. This phrase has been the subject of much legal interpretation.

As indicated at the beginning of this section, these notes are a basic outline. Detailed information can be obtained from Amicus.