Plans by the Government to reform the Transfer of Undertakings (Protection of Employment) regulations 2006 (TUPE) appear to have been scrapped.
TUPE protects the employment rights and continuity of service of employees when a business transfers from one owner to another. Under the regulations, the employees automatically become employees of their new employer, under the same terms and conditions as their old employment.
Although TUPE was originally intended to apply when a business is sold or acquired in its entirety, since 2006 it can also cover the transfer of a contract to provide services. This means that businesses that win contracts from their competitors may be obliged to take on employees from their unsuccessful rivals or pay compensation if such employees are made redundant because of the loss of the contract. These provisions can also affect outsourcing or taking outsourced services back in-house.
Prior to the General Election earlier this year it had been suggested that a Conservative Government would attempt to “rein in” this aspect of TUPE but the Department for Business, Innovation and Skills has recently confirmed that the Government has no plans to amend the TUPE regulations.
If you have any queries regarding how TUPE might apply to your business please contact us at firstname.lastname@example.org.