TUPE Transfer Checklist: A Guide for Businesses

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) protects employees’ rights during a business or service provision change. To ensure a smooth transition and avoid penalties, businesses must comply with TUPE regulations. Below is a detailed checklist to help businesses effectively manage TUPE transfers.

Understanding TUPE Transfers

What is TUPE?
TUPE applies when:

• A business or part of it transfers to a new owner.
• A service provision change occurs, such as outsourcing, insourcing, or changing service providers.

TUPE ensures that employees transfer to the incoming employer with their existing terms and conditions intact, preserving their rights and continuity of service.

Checklist for a TUPE Transfer

1. Determine Applicability of TUPE
   • Confirm if the transaction is a “relevant transfer” (business transfer or service provision change).
   • Ensure the transfer involves an identifiable economic entity that retains its identity post-transfer.
2. Employee Liability Information Provide key details about transferring employees, including:
   • Employment contracts
   • Disciplinary and grievance records (from the last two years)
   • Pending claims or potential legal actions
   This must be shared at least 28 days before the transfer to the employee representatives.
3. Inform and Consult Employees Notify affected employees or their representatives about:
   • The transfer date and reasons for it
   • Implications for their employment (economic, legal, or social impacts)
   • Measures the incoming employer intends to take
   Conduct meaningful consultations to address concerns with the outgoing or incoming employer.
4. Due Diligence
   • Review existing employee terms, liabilities, and collective agreements.
   • Assess exit clauses and restrictions in current contracts.
5. Managing Employee Rights
   • Ensure all contractual terms (salary, holidays, and benefits) transfer without changes.
   • Provide equivalent pension arrangements, as workplace pensions do not automatically transfer.
6. Post-Transfer Obligations
   • Ensure continuity in employment terms and conditions.
   • Address any organisational changes (relocations or redundancies) transparently, adhering to TUPE restrictions on contract modifications.

Legal Risks and Penalties for Non-Compliance

Failure to comply with TUPE can lead to:

• Employment tribunal claims
• Compensation of up to 13 weeks’ pay per affected employee
• Liability shared between outgoing and incoming employers

FAQs About TUPE Transfers

1. What happens to employee contracts under TUPE?
   All terms and conditions transfer unchanged, except for occupational pensions.
2. Can employees refuse to transfer under TUPE?
   Employees can opt out, but this counts as a resignation, not redundancy.
3. Can contracts be changed post-TUPE?
   Changes are only allowed for economic, technical, or organisational (ETO) reasons.
4. How does TUPE affect redundancies?
   Redundancies due to the transfer itself are prohibited unless justified by ETO requirements.
5. Do TUPE regulations apply to pensions?
   Occupational pensions are excluded, but alternative pension provisions must be provided.

Conclusion

A TUPE transfer requires careful planning, legal compliance, and clear communication with employees. Both the outgoing employer and incoming employer must work together to ensure a smooth transfer. Seeking professional legal advice early helps mitigate risks and protect employees’ rights.

For more guidance on the TUPE process, consult experts like Acas, Croner, and employment law specialists to ensure compliance and avoid legal challenges.