Transfer of Undertakings (TUPE)

• Summary of main changes
• Transfers in the public sector
• Handling the TUPE Process - Staff transfer checklist
• Guidance on data protection issues in TUPE transfers

Revised TUPE regulations came into force on 6 April 2006. The Transfer of Undertakings (Protection of Employment) Regulations 2006 SI 2006/246 are intended to implement the amended Acquired Rights Directive (No.2001/23 EC) and replace the Transfer of Undertakings (Protection of Employment) Regulations 1981 SI 1981/1794.

Summary of main changes

These provisions:

• widen the scope of the regulations to make it clear that it covers cases where services are outsourced or assigned by a client to a new contractor - 'service provision change' 
• require the old employer (transferor) to provide all relevant employee liability information to the new employer (transferee) 
• clarify the limited ability of employers and employees to agree to vary contracts of employment in a TUPE situation 
• provide greater flexibility when applying the regulations to transfers of insolvent businesses, to make it more attractive for potential buyers to rescue those businesses and save jobs 
• make clear that the regulations do not apply in relation to transfers within public administrative authorities or the transfer of administrative functions between public administrative authorities 
• require the transferor and transferee to carry a liability for failure to inform and consult employee representatives 
• ensure that the transferor and transferee will be jointly and severally liable for liabilities arising from pre-transfer employment in those cases where the transferor is an employer exempted from the requirements of the Employers' Liability (Compulsory) Insurance Act 1969

The government has issued guidance on the regulations. A Guide to the 2006 TUPE Regulations for Employees, Employers and Representatives (PDF, 196KB) is available on the BIS website. The guidance was further revised in June 2009.

Stand-alone Advisory Bulletin

Advisory Bulletin 511 provides a detailed analysis of the revised TUPE regulations. Most notable are the requirement for the transferor to provide the transferee with written 'employee liability information' and the additional definition of transfer set out under 'service provision changes'.

• Advisory bulletin no. 511

Transfers in the public sector

The application of TUPE is a matter of law, determined by the application of the regulations and the Acquired Rights Directive. However, within the public sector it is generally expected, and now required (under the Local Government Act 2003 and the Code of practice on workforce matters in local authority service contracts) that TUPE principles will apply unless there are genuinely exceptional reasons for not doing so. The background to this commitment is set out in the Cabinet Office document, produced in 2000 and revised in 2007. Download a PDF of the Statement of Practice on staff transfers (PDF, 24 pages, 379KB) and its Annex, A Fair Deal for Staff Pensions from the Civil Service website.

March 2011 update: on 23 March 2011 the Government withdrew the Code of practice on workforce matters in local authority service contracts with immediate effect. However, the withdrawal does not have retrospective effect so the Code still applies to contracts in force as of 23 March 2011. For further details of the impact of the withdrawal of the Code see Advisory Bulletin 575.

Key case law developments

The law in this area is constantly changing and new case law emerges regularly to add a different dimension and perspective to accepted thinking, for example see below:

Date of the transfer : A relevant transfer does not take place in stages. It can occur on only one particular date - that is when the transferee assumes responsibility for carrying on the business transferred. All contracts of employment and employment relationships existing between the transferor and the workers assigned to the unit are deemed to be handed over on that date, regardless of what has been agreed by the parties.

See Celtec Ltd v Astley:

• Advisory Bulletin 501(Word 52KB) 
• Advisory Bulletin 501 (PDF 83KB)

Handling the TUPE Process - Staff transfer checklist

The Employment Relations Unit (ERU) have developed a checklist of key messages in handling a TUPE transfer for senior managers, personnel professionals and line managers:

• ERU checklist guide to ... handling the TUPE process (Word 31KB)
• ERU checklist guide to...handling the TUPE process (pdf)

Guidance on data protection issues in TUPE transfers

Guidance has been published by the Information Commissioner's Office (ICO) that seeks to help transferors comply with their obligations under the Data Protection Act 1998 when providing information about their employees under TUPE 2006.

TUPE ensures that employees' terms and conditions of employment are preserved when a business or undertaking is transferred to a new employer. To achieve this, TUPE requires that certain information is provided to the new employer before the transfer takes place. This will include details of pay, contracted hours, holiday entitlement and any details of disciplinary or grievance action relating to that employee. The Data Protection Act does not prevent the transfer of this information as it is a requirement by law. However, both parties must comply with the Act when handling the information, for example ensuring it is accurate, up-to-date and secure.

A copy of the guidance (PDF 45KB) can be downloaded from the ICO website.