Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006)

TUPE 2006 is now the main piece of legislation dealing with the transfer of an undertaking, or part of one, to another. The main changes in TUPE 2006 came into effect on 6 April 2006 and they have provided useful clarification on a number of areas, although there remains confusion over the position in insolvency situations. The key points of clarification concern:

• the situations to which TUPE will apply. TUPE 2006 confirms that the regulations apply both to a transfer of a business and a service provision change for example where there is outsourcing of cleaners
• what constitutes acceptable variations to contracts of employment. Any changes must be for economic, technical or organisational (ETO) reasons only and relate to either number or functions of affected employees and, as such, harmonisation of terms and conditions cannot in itself constitute an ETO reason
• the obligations of the transferor regarding provision of employee liability information. This must be at least two weeks before transfer, otherwise there are fines of up to £500 per employee
• joint liability of the transferor and transferee for awards for failure to inform and consult with those affected, employee representatives or a trade union.

This is a highly complex area of employment law. Employers are strongly recommended to seek professional advice if they are involved in a business transfer or service provision change particularly if they are unsure if and how TUPE applies!