With our HRXchange TUPE Untangled Masterclasses in the diary, we thought we would share with you some of the most ‘popular’ TUPE myths:

  1. TUPE does not apply to share sales

TUPE does not usually apply where there is a sale of shares, but in some cases transfers of assets pre or post-sale could result in a TUPE transfer. In one such case,[1] following a share acquisition by its subsidiary, the parent company sent in its own integration team and took over the day to day management of the newly acquired company. This company was so fully integrated into its business after the acquisition that a TUPE transfer to the parent company was found to have taken place. TUPE should always be a consideration in post-acquisition integration plans as it cannot automatically be assumed that it will not apply.

  1. TUPE applies to employees who spend more than a certain percentage of their time on activities concerned with a TUPE transfer

Anyone “assigned” to an organised grouping of resources or employees that is subject to a transfer will transfer under TUPE. There is no specific percentage of time an employee must spend on the activities before they will be regarded as “assigned”. In one case[2], an employee who spent 100% of his time working on a contract for a client was found not to have transferred under TUPE because there had been no specific decision to organise his work in this way. Sometimes something more than the fact that an employee spends most of their time working for a specific client will need to be shown.

  1. The employee will be redundant if they transfer to us so, the old employer should make them redundant

As its name suggests, TUPE is designed to protect employees from losing their jobs because the organisation they work for changes hands. Under TUPE, any dismissal connected with a transfer will be automatically unfair, unless it is for an economic, technical or organisational (ETO) reason entailing changes in the workforce. The ETO reason must belong to the employer who is carrying out the dismissal. In such a situation, the employee should transfer to the new employer who would (following a fair process) make the employee redundant.

  1. Consultation must take place for a minimum period of time prior to a transfer

Unlike in collective redundancy situations, there is no fixed period of time employers must consult employees affected by a TUPE transfer. TUPE states that certain information must be provided to appropriate representatives of employees affected by the transfer “long enough before the transfer” to enable the outgoing employer to consult with them about it. This means that a plan should be put in place prior to the transfer that takes into account how long the information and consultation process will take, including where necessary the election of employee representatives.

  1. Changes can be made to contracts of employment after a certain period of time

The new employer takes on transferring employees on their existing terms of employment and changes can only be made in very limited circumstances – even if the employees agree to them. There is no time limit on this protection. Contractual changes may, however, be permitted if the reason for the change is nothing to do with the transfer itself, or if there is an ETO reason for the contractual change entailing changes in the workforce and the employees agree or where a contractual right of variation exists.

This post was edited by Helen Webster. For more information, email blogs@gateleyplc.com 

[1] Jackson Lloyd Ltd and Mears Group plc v Smith and others UKEAT/0127/13.

[2] Seawell Ltd v Ceva Freight (UK) Ltd and another UKEATS/0034/11


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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.