Selling a business where TUPE applies – what do you need to tell your employees?
I am an HR Manager of a business which is to be sold and I believe that the provisions of TUPE will apply to the sale. I know that I have to inform the affected employees (there are 12), but how far do I have to go? Can I just tell them the date of the transfer, or should I provide more specific information?
Regulation 13(2) of TUPE Transfer of Undertakings (Protection of Employment) Regulation 2006 sets out certain information that must be provided to the appropriate representatives in a transfer situation. For the purposes of this query I will assume that the appropriate representatives are in place already. The information to be provided should consist of the following:
Details of the fact of the transfer, the date it will take place and the reasons for it
If you don’t have a definite date, then send out the proposed date known to you at the time. You can always write to the appropriate representatives again, once you have a firm date for the transfer.
The legal, social and economic implications of the transfer
Often, it can be difficult to pin down what these might be, however, an example of a legal implication may be what the effect of TUPE will be on the employee if it does apply e.g. that their contractual terms and conditions will not be affected by the transfer. An economic implication might be information about the transferee company’s financial position, and a social implication might be information about changes to start and finish times of work for the employee. Often it will be the case that there may be a legal implication, but no social or economic implications. If that is so, you should still put this into your letter.
Information on measures
Broadly speaking, a “measure” is an “action” which can be positive or negative, taken in connection with the transfer. Examples of measures might include changes to the way that employees are to be paid after the transfer or, if redundancies are to be carried out by the transferee after the transfer. You must tell the appropriate representatives of any measure that you plan to take relating to the transfer. If you will not be taking any measures, you need to tell them that.
Furthermore, you will need to write to the transferee, to establish from them, what, if any, measures they plan to take, in relation to the transfer. You will need to inform the appropriate representatives, what those are. Again, if the transferee plans to take no measures, you need to tell the appropriate representatives that fact.
Often the question will come up around timing and when should the information above be given to the appropriate representatives? There is no set minimum deadline, pre-transfer, by which this must be provided, but Regulation 13(2) of TUPE states it must be given to the appropriate representatives “long enough before the relevant transfer to enable the employer of any affected employees to consult the appropriate representatives of any affected employees”. This basically means in good time and to allow for proper and meaningful informing and consulting to take place.
Remember also, that the information will need to go to the appropriate representatives and not directly to the employees themselves, in order to comply with your TUPE obligations. Often employers think that they are complying with TUPE when they inform or consult the affected employees directly, but actually that would be a breach of TUPE, by not dealing with the appropriate representatives. Note that the obligation to consult with the appropriate representatives will apply if measures are envisaged in relation to any of the affected employees by either the transferor, or the transferee.
As TUPE is a complex area of law, I would highly recommend that legal advice should be sought early enough prior to the transfer date, so that you are properly informed of the process to follow and so that you stand the best chance of complying with your various obligations.
The main content of this email was provided by Rachel Richardson of Tughans, Solicitors in Belfast. Rachel works exclusively in Employment Law and should anyone have any queries she may be contacted at:
028 9055 3300
While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.