There are many issues for employers to consider where there is to be a transfer of all or part of a company’s or business’ assets.
Arguably, one of the most important assets (and sometimes liabilities) of any transfer are the employees, and the proposed changes can evoke a concerning time for the affected individuals no matter how large or small the business or company. The Transfer of Undertaking (Protection of Employment) Regulations 2006, or ‘TUPE’ regulations, seek to protect employees’ rights, including the transfer of the employees’ terms of employment, and their longevity of service and making it unlawful for employees to be dismissed as a result of the transfer.
There are certain processes and requirements which have to be followed by an employer during a transfer which can assist in making the process as smooth as possible for all parties involved.
What does the old employer have to do?
Notify the employees of the Transfer
Regulation 13 of TUPE requires the current employer to inform and consult with representatives of its affected employees as soon as is reasonably practicable prior to the transfer taking place.
There is no time scale for the consultation period however during this time, there should be a discussion with employees to allow them to ask any questions or raise any concerns that they have. If there are any material changes which the new employer is seeking to propose, then these can be raised with the employees at this stage to allow employees time to consider and express any concerns.
Provide Employee Liability Information
The current employer will need to provide information about the affected employees to the new employer in accordance with Regulation 11 of TUPE. This would usually include the age, contractual terms including job role. The information must be provided no less than 28 days before the transfer and if any of the details change prior to the transfer completing, the new employer must be updated. Details of pensions should also be provided however the pension may not transfer where there is a company pension scheme. The contributions paid by the employer cannot however be reduced. Care should be taken when providing this information so as not to breach GDPR.
Does an Employee have to transfer?
An employee who is affected by a TUPE transfer does not have to transfer and they can instead resign from their position should they not wish to transfer, however, there is no corresponding right afforded to an employee to elect to stay with their current employer. Where employees are unhappy with the transfer, it is important to ensure that during the process, the employees’ contractual terms, either express or implied, are not breached, so as not to give rise to a breach of contract claim.
Can the new employer change the terms of employment?
No, is the simple answer except in limited circumstances. Employees cannot be dismissed and the contracts of employment cannot be varied by reason of the transfer. This restriction is not just at the time of the transfer but is also in the future if the reason for the change is the transfer. A change can, however, be made in limited circumstances i.e., where there is an Economic, technical or organisational reason (ETO reason) however this is difficult to apply and cannot be applied purely to harmonise contracts with the new employer’s current employee contracts.
Practical considerations
Transfers under TUPE can cause concern and distress for employees and therefore communication with employees is key to ensure that any questions or concerns raised are heard, considered and responded to. To assist with the transaction, the new employer will often set aside time with employees after the transfer has taken place to make sure that any outstanding concerns are dealt with and to assist in settling matters back down after the transfer.
At O’Donnell Solicitors, our Employment Solicitors work alongside our Corporate department to assist on TUPE matters and other Employment Law issues which may arise during an asset sale or purchase. For more information or to speak with an Employment Solicitor contact Suzzanne Gardener on 01457 761 320 or email suzzanne@odonnellsolicitors.co.uk
