TUPE and Business Re-organisations

TUPE strikes fear in the minds of many employers and advisors. However, with our extensive experience in dealing with TUPE situations there need not be such fear.

TUPE is complex - in essence it applies when one business takes over the running of another business or part of another business (other than by a share acquisition). The effect of the provisions are basically to ensure that everything remains the same for the employees other than the change in ownership and possibly name.

If an employer dismisses an employee because of a transfer that dismissal is deemed as being automatically unfair.

Dismissals on a transfer are permitted in certain circumstances. The employer is able to argue that the transfer was not the principal reason for the dismissal rather there was an economic, technical or organisational reason which entailed a change in the workforce (i.e. an ETO reason) which justified the dismissal. The definition by the Employment Tribunals and Courts of what constitutes an ETO reason has been controversial and has made dismissals following a transfer more difficult than would be the norm.

The TUPE Regulations require employers to consult with staff on specified matters prior to a transfer. The provisions in respect of consultation can be onerous and are often ignored. The penalty for failing to adhere to the provisions is severe - it is 13 weeks gross pay for each affected employee. It should be noted that the penalty is punitive therefore is calculated with respect to the employers failure and not the employees losses.

With our extensive experience of TUPE we can guide you through the provisions to ensure that the employment issues on the sale or purchase of a business run smoothly. Talk to Andrew today Andrew Moore, andrew.moore@clough-willis.co.uk