Specialist TUPE solicitor, Charlotte Holman, takes a look at the transfer of employees and what constitutes a breach of TUPE regulations.
Failure by employers to correctly follow or comply with their obligations under TUPE can lead to serious ramifications.
Where an employer fails to comply with their duty to inform and consult with affected staff, they could be ordered to pay compensation to each affected employee. This compensation can be of up to a maximum of 13 weeks’ gross pay. Both incoming and outgoing employers can be held jointly and severally liable for payment of the compensation. Therefore, even if one party complies, they may still be ordered by a Tribunal to contribute towards any award of compensation where the other party has failed to comply.
In a sale of a business, the old employer will be required to provide the new employer with certain information about the transferring employee. This is usually referred to as ‘Employee Liability Information’ and should be provided at least 28 days before the transfer. If the old employer fails to provide Employee Liability Information to the new employer then the new employer can apply to the Employment Tribunal for compensation. The penalty is paid to the new employer and is calculated on the basis of a minimum award of £500 for each employee where their information is incorrect or has not been provided at all.
The new employer who will be taking on the transferring employees can only make changes to their terms of employment in very limited circumstances. Changes will be void if the sole or principal reason for the change is the transfer itself unless it can be shown that:
The obligation to inform and consult is in relation to any ‘affected’ employees. The duty applies to both the old and the new employer. So that the old employer is able to comply with its obligation to inform, the new employer should provide information to the old employer on any planned changes (also known as measures) which are connected to the transfer. All proposals, no matter how trivial, should be notified to employees and if there are no changes planned then that too should be communicated to employees. Consultation should be a two-way process between the parties to allow affected employees the ability to raise any concerns or suggestions they have, and for the outgoing and incoming employers to address such issues and try and agree any proposed changes with the workforce in good time before the transfer takes place.
Whilst there is no set time frame for how long consultation should last, it should provide ample opportunity for discussions to take place in good time before the transfer between both parties. Employers who are involved in a larger scale transaction will need to consider a longer period for consultation to take place as there will likely be more employees affected by the transfer which will generally mean more concerns or issues may arise during the process.
If your business is in the process of a TUPE transfer, or you are considering a business purchase where there is a TUPE requirement, our specialist employment lawyers can assist you to ensure the complex process is complied with.
Call us on 01206 593933 today to speak with one of our employment law team. Or complete the form below.
A Mackman Group collaboration - market research by Mackman Research | website design by Mackman
