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TUPE or the Transfer of Undertakings (Protection of Employment) Regulations protects employees’ terms and conditions of employment when a business is transferred from one owner to another.

When the business changes hands, employees of the previous owner automatically become employees of the new employer on the same terms and conditions. It’s as if their employment contracts had originally been made with the new employer with continuity of service and any rights are all preserved. Both old and new employers are required to inform and consult employees affected directly or indirectly by the transfer.

TUPE can be complex and it’s highly recommended that businesses consult Employment Law experts to ensure that the correct procedures are being adhered to.

Failure to inform and consult or to follow TUPE procedures can lead to:

  • A complaint being made to The Employment Tribunal. If successful the Employment Tribunal can award compensation up to a maximum 13 weeks’ pay per affected employees. Information and consultation failures can result in joint and several liabilities between the outgoing and incoming employers, although the contract governing the transfer can cater for apportionment of liability here.
  • The incoming employer applying to the Employment Tribunal for compensation which will be assessed with regard to the losses suffered with a minimum award of £500 per employee. A failure to comply with TUPE could therefore expose employers to claims large enough to undermine the entire transaction.

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