| Employees - Transfer of Undertakings |
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When a business is sold by one employer to another, or the responsibility for providing a service transfers from one employer to another, the question arises as to what happens to the dedicated workforce? Do they retain the contractual and other rights that they enjoyed prior to the transfer? These are the main issues with which the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) are concerned.
The TUPE Regulations apply when:
And
before the transfer in the United Kingdom to another person where there is a transfer of an economic entity which retains its identity - A service provision change will also be a relevant transfer Who is covered by the TUPE?
The transferee inherits those employees employed by the transferor on their existing terms and conditions, assuming that they do not object. If the employee is dismissed (whether actually or constructively and whether before or after the transfer), if the sole or principal reason for the dismissal is either a) the transfer or b) a transfer-connected reason that is not an economic, technical or organisational reason entailing changes in the workforce then the dismissal is automatically unfair i.e. the court will not need to consider whether the dismissal is reasonable, provided the employee has one year’s continuous service. If the sole or principal reason is an economic, technical or organisational reason entailing changes in the workforce (of either the transferor or the transferee), before or after a relevant transfer, there is no automatically unfair dismissal. The dismissal will be regarded as having been for redundancy or some other substantial reason. The effects of a relevant transfer are:
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