Reminder for employers – TUPE regulations are changing

Changes to the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations will apply to certain transfers starting from 1 July 2024.

These will primarily affect the consultation and communication process with staff during a transfer.

Last year, Parliament enacted these changes through the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (SI 2023/1426).

What is TUPE?

The TUPE regulations are designed to protect employees when a business or service is transferred from one employer to another.

The main aim is to ensure that employees’ terms and conditions of employment are preserved, providing continuity of employment.

There are a few key steps in the TUPE process that must be considered:

Identification of a TUPE transfer: A TUPE transfer occurs when there is a transfer of an economic entity thatretains its identity. This includes business transfers (e.g., mergers, sales) and service provision changes (e.g., outsourcing, insourcing, or a change in service providers).

Employee information and consultation: Both the outgoing employer (transferor) and the incoming employer (transferee) must inform and consult with affected employees or their representatives (e.g., trade unions) about the transfer. This includes providing information on the reasons for the transfer, the legal, economic, and social implications for employees, and any measures envisaged in relation to the employees.

Provision of employee liability information: The transferor must provide the transferee with written details of the transferring employees’ terms and conditions, employment particulars, disciplinary records, grievances, claims, and collective agreements at least 28 days before the transfer.

Protection of terms and conditions: Employees transfer to the new employer on their existing terms and conditions of employment. This includes preserving their continuity of employment and any collective agreements in place. The new employer cannot change these terms and conditions simply because of the transfer.

Automatic transfer: Employees automatically transfer to the new employer on the transfer date. Their employment is continuous, and they should not be dismissed or have their terms and conditions changed unfavourably because of the transfer.

Dismissals and changes to terms: Dismissals directly related to the transfer are automatically unfair unless there is an economic, technical, or organisational (ETO) reason entailing changes in the workforce. Any changes to terms and conditions must be agreed upon and cannot be solely because of the transfer unless there is an ETO reason.

What is changing?

The new regulations provide employers with more flexibility to consult directly with employees, rather than through representatives, in the following situations:

• The organisation employs fewer than 50 employees.
• The transfer involves fewer than 10 employees (regardless of the organisation’s size) and takes place on or after 1 July 2024.

In these cases, direct consultation is permitted only where there are no existing employee representatives. Employers still have the option to consult with an employee representative if preferred.

Next steps for employers

Organisations that meet the criteria outlined above and do not have existing employee representatives in place will not be required to consult with employee representatives for TUPE transfers occurring on or after 1 July 2024.

However, TUPE transfers not meeting these criteria must continue to involve employee representatives in consultations.

Employers should act now to understand these changes and how they might impact their organisation. Seeking legal advice is essential, especially if you are already considering scenarios where TUPE will be relevant.

Proper planning and compliance will ensure a smooth transition under the new regulations, so please get in touch.