Managing TUPE: 4 Important Steps In The Process  

The Mergers & Acquisitions market experienced significant growth during 2020/ 2021, posting record activity levels despite the COVID-19 pandemic. Business Intelligence experts at the start of 2022 were predicting strong continued M&A activity, and there was a positive vibe due to the lessening threat of COVID and worldwide political stability. This stability was shattered in February 2022 when Russia invaded Ukraine. The global political scene has devolved into chaos, and capital markets have become extremely unpredictable. It is unknown how M&A activity will fare for the rest of 2022. If you are in the throes of managing an acquisition or divestiture or a service provision change you will need to become quickly acquainted with the term “TUPE”

What Is TUPE?

Transfer of Undertakings Protection of Employment ( TUPE) is a complex and technical process aimed at protecting employees. The regulations apply when employers are transferring a business or in a service provision change scenario. The specific steps involved in the TUPE process will vary depending upon the circumstances.

• Are you transferring the whole business, or is it just particular service provisions?
• Are you the incoming or outgoing employer?

Whatever the case may be, it is a risky business if not handled correctly. There are several pitfalls to be aware of, as conflicts and disagreements may occur early on. For example, watch out for difficult scenarios such as staff refusing to transfer, inability to offer the exact same benefits, and having to source equivalents, challenges, disputes, and hidden TUPE situations.

Key Stages OF TUPE

You’ll need to go through the following stages:

• Identify All Impacted Employees.

Communication is critical, and consideration should be, given to :

• • Engaging with trade union officials or elected representatives.
  • Providing communication mechanisms to answer questions and address any employee concerns.

 

• Gathering Information & Consultation

You should provide employees (or their representative(s)) with information relating to:

• • The fact that the transfer is taking place.
  • The proposed (or actual) date of the transfer.
  • The reason for the transfer.
  • The implications (legal, economic, and social) of the transfer to affected employees.
  • Any proposed measures connected with the transfer that’ll affect the employees. If no measures are in place, you must also make that clear.

While there’s no set time limit for providing this information, you should complete it in ‘sufficient’ time for a consultation to take place. Failure to comply with this obligation can result in compensation for each employee of up to a maximum of 13 weeks’ pay.

 

• Employee Liability & Due Diligence

As well as the information employers should provide to their employees, you’re also obligated to provide incoming employers with certain information.

Whether or not TUPE applies, any organisation buying a business or bidding for a contract to provide a service must undertake due diligence.

Failure to supply this information or for providing incorrect information can result in compensation by a tribunal.

 

• Terms & Conditions 

You should also send comprehensive details of all transferring employees’ employment terms and conditions to the incoming employer as part of the employee liability information. It should include information relating to the terms and conditions that can be transferred during the process.

 

If you are about to acquire, divest, merge, or manage a contract service provision change, register for our free webinar on TUPE Essentials here. The seminar holding on Thursday 7th April 22, 10 am to 11 am is a great opportunity to tap into expert advice and top tips from Adam Brett, Employment Law Partner at Lewis Silkin (N.I.) LLP and our Managing Partner, Anne Dougan.

If you would like to speak with one of our consultants about getting TUPE support , send an email to enquiries@thinkpeople.co.uk We’ll support you to handle delicate conversations, help you ensure a legally compliant reorganisation process and avoid claims of unfair dismissal/discrimination allegations.