TUPE: How to get the transfer process right

TUPE transfer checklist for the incoming employer

As the incoming employer, or “transferee”, you will need to assume all the rights, responsibilities and liabilities that the outgoing employer held towards their employees – so that the employees aren’t disadvantaged by the transfer.

Here are the steps you’ll need to follow:

1.  Obtain essential information from the outgoing employer

As soon as possible, find out:

• how many transferring employees there are
• whether any of your current employees might be affected by the transfer.

2. Obtain ‘employee liability information’

Employee liability information must be provided to you by the outgoing employer a minimum of 28 days before the transfer.

The information includes:

• The identity (usually the name) and age of the employees who will transfer.
•  Information contained in their employment contracts in relation to their terms and conditions such as a statement of pay, hours of work, holidays, length of service and so on.
• Information about any relevant collective agreements.
• Details of any disciplinary action taken against an employee in the last two years.
• Details of any employee grievances raised in the last two years.
• Details of any legal action (before the court or employment tribunal) brought against the employer by an employee in the last two years and information about any potential legal action.

3. Provide any ‘measures’ information to the outgoing employer.

‘Measures’ is the term used for the changes to employment arrangements which an incoming employer may wish to make after the transfer.

They might include any potential redundancies, changes to contractual terms such as pay dates or pension arrangements, workplace relocation or different working patterns.

The outgoing employer requires this information so that they can consult on your proposed measures with their employee representatives and/or unions.

As an incoming employer, you can only make changes to the terms and conditions of employees that transfer in for Economic, Technical and Organisational (ETO) reasons.

• Economic reasons are to do with how the company is performing
• Technical reasons are to do with the equipment or processes the company uses
• Organisational reasons are to do with the structure of the company

Any changes that you try and make that are motivated purely by the TUPE transfer will not be enforceable even if they take place a significant time after the transfer.

4. Meet with transferring employees

Before the transfer (with permission from the seller) arrange to meet with the transferring employees to discuss measures, check employee information and answer any questions the employees might have.

5. Identify any contractual benefits

Identify any contractual benefits that must be provided to employees following the transfer such as death in service or private medical insurance. Make arrangements to continue to provide those benefits in good time before the transfer.

6. Write to transferring employees

Write to transferring employees to formally confirm the details of their new employment.

TUPE transfer checklist for the outgoing employer

If you’re selling the transferring business or service, you’ll need to follow these steps.

1. Identify which employees will transfer

As early as possible identify which employees will transfer to the incoming employer. If you’re selling the whole of the business, then all employees will transfer. If you’re only selling part of the business, consider which employees are allocated to the part of the business that is being transferred.

2. Request information from the incoming employer about any measures

Find out about any measures the incoming employer intends to take after the transfer so that you can consult on the proposed measures with your affected employees (or their representative) before the transfer takes place.

3. Provide ‘employee liability information’ to the incoming employer

You’ll need to provide this information (as outlined above) a minimum of 28 days before the transfer.

4. Fulfil your obligation to inform affected employees

If your business as a whole has less than 10 employees you should meet with affected employees to give them the required information about the transfer and any information about proposed measures you have received from the incoming employer.

If you have more than 10 employees, you’ll need to invite affected employees to elect representatives to receive and pass on information about the transfer.

You’ll need to provide information on:

• The fact the transfer is taking place, when and why
• Implications for affected employees
• Measures that will be taken by the incoming employer

Failing to inform and consult

Aside from damaging employee relations, failing to inform and consult with employees during the TUPE process can have legal consequences.

Each employee who is not informed and/or consulted about the transfer could claim up to 13 weeks uncapped pay, so the cost of getting it wrong could be significant, both to the incoming and outgoing employer.

Data protection and TUPE

Be mindful of GDPR when providing personal data. Whilst there is a lawful purpose for processing the data, an incoming employer should ensure that the outgoing employer has taken appropriate steps to ensure that they are GDPR compliant. This includes checking that the outgoing employer has relevant data protection policies in place in relation to employee data.

Don’t forget

For both the incoming and outgoing employer, it’s essential to make sure that all affected employees are adequately informed and / or consulted with. This includes employees who may not be transferring, but who will still be affected as a result of the transfer.

A TUPE transfer can be a really unsettling time for employees and they deserve to be part of the conversation.