When does TUPE apply?

Specialist TUPE solicitor, Charlotte Holman, takes a look at the when TUPE applies and when it does not.

TUPE is a piece of legislation which is primarily concerned with protecting the employment of employees when there is a change in the identity of their employer.

TUPE applies to a ‘relevant transfer’ which means it will cover either or both of the following scenarios:

• A business transfer (the sale or purchase of part or all of a business as a going concern); or
• A service provision change (outsourcing and insourcing - this covers situations where an employer engages a contractor to do work on its behalf, reassigns a contract to another contractor or brings the work ‘in house’)

TUPE can apply to the grant or take over a lease or license of premises and also where operation of the same business from those premises occurs.

When does TUPE not apply?

There may be situations where TUPE does not apply to a transfer or certain groups of staff however this is a particularly complex area and is dependent on a number of facts relating to the transfer or service provision change.

Generally speaking, TUPE will not apply to a transfer of shares as there is no transfer of a business from one party to another as the business remains the same although the owner of the business has changed. It could however, apply to an asset transfer carried out as a precursor to a share sale or a transfer of the business or part of the business to the holding company following a share transfer.

Some of the TUPE protections may be relaxed in situations involving insolvent businesses, this is so as to reduce the burden on a buyer of an insolvent business and try and facilitate the rescue of the business.

TUPE will not usually apply where a contract is made for the supply of goods or where the activities are carried out for a specific event or short-term duration. TUPE may also not be applicable to employees who do not form part of an organised group carrying out work for a client.

What is an ‘organised grouping of employees’

For TUPE to apply to staff in connection with a transfer, staff must be part of an organised grouping of employees. This essentially means that the group of staff have been deliberately put together to carry out a client’s work. It is possible for a single employee to constitute an organised grouping.

If only part of an employee’s job is being transferred (for example, because they split their time servicing client A and client B) then whether TUPE applies will depend on whether the employee is part of an organised grouping of employees that meets the client’s needs.

Local TUPE solicitors

Holmes & Hills have specialist employment lawyers with extensive experience in dealing with TUPE transfers. Contact us today to access TUPE advice or discuss any other area of employment law.