TUPE: Transfer of Undertakings (Protection of Employment) Regulations

Looking to transfer your workforce in the United Kingdom? There are a lot of compliance requirements to consider. Leverage this guide and the expert support from TCWGlobal’s UK Employment of Record (EOR) services to make the TUPE process a breeze and avoid any compliance mishaps.

Key sections of this guide include:

1. What is TUPE
2. When does TUPE apply?
3. Key protections for workers
4. Each company’s responsibilities during TUPE
5. How TCWGlobal will guide you through the process
6. Handling TUPE: Step-by-Step Guide for Employers
7. Need Help? 

What is TUPE?

TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations 2006 (as amended in 2014). It is a piece of UK employment legislation that protects a worker’s rights when the business or service unit they work for is transferred to a new employer.

The purpose of TUPE is to ensure that workers retain their terms and conditions of employment when their employment transfers between entities.

When Does TUPE Apply?

TUPE applies in two main situations:

1. Business Transfers

   • A company decides to switch from EOR Provider A to EOR Provider B as part of a corporate restructuring or to consolidate employment across multiple countries. The work being performed remains the same and the workers even report to the same client managers. However, the "undertaking" (i.e., responsibility for employing the staff) is transferred from one entity to another.

2. Service Provision Changes (SPCs)

   • When a service contract is outsourced, insourced, or transferred to a new provider.

• Examples:
  • Outsourcing: A company previously hired workers directly but decided to move them to an EOR provider for compliance and efficiency. The EOR becomes the new legal employer, but the employees still do the same work for the company. The responsibility for providing the service (employment/payroll) is transferred to a third party (EOR A).
  • Insourcing: A company used an EOR to hire workers originally. The company now has an entity established in the UK and has decided to hire those workers directly. The workers will continue performing the same jobs, but the employer becomes the company directly. Insourcing means the company taking the services in-house.
  • Re-tendering: A company uses EOR A to employ marketing contractors. It switches to EOR B. The same employees continue to provide the same services to the company, just through a new EOR. EOR A stops providing the service, and EOR B takes over with the same staff.

The Key Employee Protections Under TUPE

• Automatic Transfer:
  • Workers automatically transfer to the new employer.
  • Their continuity of employment is preserved with the transfer.
• Preservation of Terms and Conditions:
  • Their existing terms and conditions (e.g., pay, holidays, working hours) must remain the same.
  • Any intent to change terms due to the transfer is usually unacceptable unless there is an economic, technical, or organisational (ETO) reason for the change to be made. Examples below:
    • Economical: Related to the profitability or cost of running the business
    • Technical: Related to equipment or processes used
    • Organisational: Related to the structure of the company or roles
• Protection Against Dismissal:
  • Dismissals connected to the transfer are automatically unfair, unless for an ETO reason. It is important to note that dismissals due to an ETO reason may still be disputed by workers and should be used with caution.
• Right to be Informed and Consulted:
  • Company must inform and consult with workers and/or their representatives.

Each Company’s Responsibilities during TUPE

Both the outgoing employer (transferor) and the incoming employer (transferee) have legal responsibilities under TUPE.

1. Informing and Consulting Workers

• If workers are represented by a union or elected reps, the employers must consult them.
• If not, depending on the size of the population being transferred, the employers must help the workers elect a representative group to consult with.
• Information provided to workers about the transfer must include:
  • The facts surrounding the transfer.
  • When and why, it is happening.
  • Legal, economic, and social implications.
  • Measures the employer expects to take (if any).

Timing:
Consultation must begin long enough before the transfer to allow meaningful discussions.

2. Worker Liability Information

The outgoing employer must provide the incoming employer with written details about the transferring employees at least 28 days before the transfer.

This includes:

• Identity and age of employees.
• Employment terms and conditions.
• Disciplinary and grievance records.
• Collective agreements.
• Any claims brought by employees.
  
  

How Can TCWGlobal Help?

TCWGlobal has extensive experience supporting clients through TUPE of their UK workforce. TUPE applies if a client will be:

• Transferring workers to TCWGlobal from their internal workforce or another EOR, or
• If they have made the decision to transfer TCWGlobal UK workers to their internal organization or another EOR.
  
  

Handling TUPE: Step-by-Step Guide for Employers

The below section outlines an overall process flow that will be customized and adapted to the specific situation.

Step 1: Identify If TUPE Applies

• TCWGlobal will help analyze the situation to determine if it qualifies as a business transfer or a service provision change.

Step 2: Plan Early

• TCWGlobal will assess the implications and consult with your internal teams.

Step 3: Inform and Consult

• Once the workers are identified, TCWGlobal will assist with informing and preparing for the consultation.
• During the information stage, any changes proposed due to ETO will be highlighted in the first notice.

Step 4: Conduct Due Diligence

• For incoming employers: assess worker liability information provided.
• Review contracts and HR records to ensure all terms and conditions may transfer over.

Step 5: Share Employee Information

• Outgoing employers must share employee liability information on time.

Step 6: Complete the Transfer

• Workers will transfer on the agreed date after signing a final transfer notice agreeing to the transfer.

There’s a lot to consider, right? When working with TCWGlobal, you can have peace of mind knowing our team of United Kingdom employment experts will consult, guide, and facilitate the TUPE process start-to-finish, keeping you informed and involved along the way. If you are looking for a partner in UK employment who will prioritize compliance and customer service, contact hello_unitedkingdom@tcwglobal.com to let us help get you started!

Need Help?  

Need help managing your contingent workforce? Contact TCWGlobal today to learn more.  

Whether you need expertise in Employer of Record (EOR) services, Managed Service Provider (MSP) solutions, or Vendor Management Systems (VMS), our team is equipped to support your business needs. We specialize in addressing worker misclassification, offering comprehensive payroll solutions, and managing global payroll intricacies.  

From remote workforce management to workforce compliance, and from international hiring to employee benefits administration, TCWGlobal has the experience and resources to streamline your HR functions. Our services also include HR outsourcing, talent acquisition, freelancer management, and contractor compliance, ensuring seamless cross-border employment and adherence to labor laws.  

We help you navigate employment contracts, tax compliance, workforce flexibility, and risk mitigation, all tailored to your unique business requirements. Contact us today at tcwglobal.com or email us at hello@tcwglobal.com to discover how we can help your organization thrive in today's dynamic work environment. Let TCWGlobal assist with all your payrolling needs!