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TUPE - Acquiring or transferring a business or service

This section of FAQs answers the most common questions in relation to buying or selling a business or part of a business, or taking over, or transferring to another a service provided to a business e.g. catering or cleaning. TUPE regulations cover all such eventualities and a failure to abide by them can carry stiff penalties.

• What is a transfer of an undertaking?
• If I buy a new business, who is liable for any outstanding employment issues, e.g. disciplinary cases, claims to tribunals, injury claims?
• I am buying a new business which has existing employees. What do I need to tell the new employees?
• I am selling a business and my employees will go to the new owner. What do I need to tell my employees?

  You should warn all employees as early as possible about the transfer and tell them that you will be consulting with them as required by law. Obtain from the new owner the measures he plans to take in relation to the employees who will transfer. Once information has been obtained inform the employees (or their representatives) in writing of the proposed date of transfer and of any measures to be taken that may affect them.

  Unless no measures are envisaged that affects any employees (this is rare) then you need to consult with them (or their representatives) collectively. Consultation will typically be around changes to terms and conditions of employment and dismissals by reasons of redundancy or reorganisation. To be ‘meaningful’ consultation must involve adequate information, adequate time and be conducted with a view to reaching agreement on each topic.

  You should also consult individually with those employees who will be affected by the change e.g. those who may be selected for redundancy. Whilst you can’t force the new owners to respect an employee’s rights you need to keep their trust by advising them clearly of the situation.

  If consultation is not required then your employees will still need to be informed of the transfer and the reasons for it.

  After consulting/informing employees you should also advise them of the fact of the transfer and the identity of the new owner. In this communication you should advise them of any matters relevant to their no longer being your employees, e.g. occupational pension options.

  The regulations also place an obligation on the transferor to supply minimum information to the transferee about the employees who will transfer. This information must include names, ages, contracts of employment or statements of written particulars, information about any collective agreements, disciplinary action or grievances in the last 2 years and details of any legal action taken by employees against the employer in the last 2 years.

  A failure to supply this information could result in a penalty against the transferor of not less than £500 per employee transferring.

• The staff in the new business I am buying are paid more than my existing staff. Can I reduce their pay so that everyone is equal?
• I am buying a new business but I do not want all of their people as I want my own management team to take over. Can I make the new businesses’ managers redundant?
• I am buying a new business and taking on their staff. One of their employees is objecting to the transfer. What do I do?
• My employees are transferring to a new employer as a result of the sale of my pub. Does this mean that their continuity of employment starts all over again?
• Am I ever able to change the terms of an employee I have acquired through TUPE?
• Can I increase the favourability of an employee's terms & conditions?