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Where TUPE applies the incoming new employer effectively steps into your outgoing employer’s shoes in relation to its employees; but not all existing rights and obligations transfer. This Briefing Note will help you to establish if your employment transfers and what rights you will and won’t have after the transfer has taken place.
Will your employment transfer?
Your employment will transfer if you are an employee and you are assigned to the business or undertaking (or part of it) which is transferring to the new owner, or if you are working in a job that is subject to a TUPE ‘service provision change’.
Are you an employee?
The protections of TUPE only apply to employees. The definition of an employee under TUPE is wider than normal and will include an individual who works under a contract of employment or apprenticeship.
If you are a worker, an agency worker or self-employed TUPE will not apply to you.
Are you assigned?
In many cases it will be obvious that you are assigned, and working in the business or undertaking which is transferring. This is particularly so if the whole business or undertaking is being transferred.
Problems occur where part of a business or undertaking is transferring. Whether you are assigned to the part transferring will involve consideration of a number of factors, including:
- the percentage of time you spend working in that part
- if you work under the direction of or for another employee, and whether that employee transfers;
- whether you are permanently or temporarily working in the transferring part; and
- whether you are employed immediately before the transfer takes place.
No single factor is conclusive and it can be quite difficult to work out the answer.
The right to object
You may not want to transfer and work for the incoming employer. If so you have the right to object. You must tell either the outgoing or incoming employer before the transfer takes place that you wish to object.
By objecting your employment will not transfer to the incoming employer; nor will you remain employed by the outgoing employer. Your employment will automatically come to an end on the date of the transfer.
Importantly, if you object and your employment comes to an end you will be considered as not having been dismissed. This means that you could not bring a claim for unfair dismissal!
Why would anyone object?
There are some advantages. Your employment automatically ends on the transfer date. This means that you may not have to work your notice period. Also, as your contract of employment does not transfer to the incoming employer, they cannot enforce any restrictions, including restrictive covenants, on what you cannot do after your employment has ended.
Your right to resign
You may also have the option of resigning your employment for one or more reasons relating to the transfer. This may be your preferred option because you can bring a claim for unfair dismissal.
If your employment transfers, the rights, powers, duties and liabilities of your outgoing employer connected with your employment automatically pass to the incoming employer along with any acts or omissions, which are treated as having been done by the incoming employer. This is known as the automatic transfer principle.
Terms and conditions that transfer include:
- your period of continuous service
- any rights and obligations (including benefits) under your contract of employment
- liability for any acts or omissions (for example non-payment of salary or bonus or which might give to a claim for unfair dismissal or discrimination) by the outgoing employer before the transfer
- any collective agreement between the outgoing employer and recognised trade unions which relate to the employees transferring – this may mean that you benefit from pay rises agreed by the outgoing employer under the collective agreement after the transfer has taken place
- obligations to pay a percentage contribution into a personal pension scheme; and
- early retirement or enhanced benefits on dismissal.
What does not transfer?
The automatic transfer principle is not all encompassing. What may not transfer includes:
- many non-contractual policies within, for example, a staff handbook of the outgoing employer
- many non-contractual profit and share schemes; and
- rights that relate to old age, invalidity and survivors’ benefits under an occupational pension scheme.
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