The Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”)
Transfer of a business
There are a number of situations when employees will find that the identity of their employer has changed, for example when the employer sells the business or part of the business or upon the transfer of a contract. In situations such as these, employees’ terms and conditions could be protected by The Transfer of Undertakings (Protection of Employment) Regulations (“TUPE”) when they transfer to a new owner or contractor.
Before any transfer takes place (long enough to ensure a proper consultation takes place), employees have a right to be given information through representatives about the fact that a relevant transfer is to take place; when it is likely to happen; the reason; the legal, economic or social implications; and whether any new measures are envisaged by the new employer in relation to the employees.
If measures are envisaged the representatives must be consulted.
Any change of a fundamental term such as pay, hours of work etc by the new employer may constitute a breach of contract and allow an employee to claim constructive unfair dismissal. Any dismissal which takes place because of the transfer either after the transfer by the new employer or before the transfer by the previous employer may be automatically unfair. Sometimes an employer will be able to justify a dismissal or a contract change if there is an economic technical or organisational reason and the process is handled correctly.
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