Transfer of Undertakings (Protection of Employment) Regulations 2006

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) known colloquially as TUPE and pronounced tu-pee, are the United Kingdom's implementation of the European Union Business Transfers Directive. It is an important part of UK labour law, protecting employees whose business is being transferred to another business. The 2006 regulations replace the old 1981 regulations (SI 1981/1794) which implemented the original Directive.

The regulations' main aims are to ensure that, in connection with the transfer, employment is protected (i.e. substantially continued).

These obligations of protection are placed on the transferring companies both before, during and after the transfer. The obligations are relieved if there is an "economic, technical or organisational" reason for the cessation of employment Regulation 7(1)(b), or alteration to employees terms and conditions, Regulation 4(4)(b).pptyp

This does not apply to transfers which go merely through the sale of a company's shares. When that happens, because the company is still the same company, all contractual obligations stay the same. The Directive and Regulations apply to other forms of transfer, through sale of physical assets and leases. The regulations also apply in some cases for work transferred to contractors. This protected contract terms for workers include hours of work, pay, length of service and so on, but pension entitlement is excluded.

Imagine a company that has in-house cleaners. The company decides that they want to tender-out the contract for cleaning services. The new company that takes over the work may employ the same cleaners. If it does so, TUPE will make it likely that the new employer will have to employ the cleaners subject to the same terms and conditions as they had under the original employer.

If any staff are dismissed by either employer for a reason connected with the new arrangement this will automatically be deemed an unfair dismissal and the new employer will be liable for any statutory claims arising as a result.

This is also the case where a target business (as distinct from shares in a company) is bought from company A by company B (often much larger) and integrated with the business of company B.

The benefits to individual workers are clear; TUPE prevents the possibility of everybody in the firm losing their jobs, just because the company providing the service changes. This gives employees increased certainty. A side-effect of the new regulations could prove unfortunate for some employers. This has been particularly highlighted in connection with law firms.

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