How to avoid TUPE pitfalls
Last month, Gill Wilkinson explained when the the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) apply. Gill highlights a few mistakes for employers to avoid in a TUPE situation
Changing terms of employment
Any changes made by the new employer to terms of employment will be void if the reason for the change is the transfer or a reason connected with it. This makes it very difficult to harmonise terms and conditions of employment. If changes are made to an employee’s contract that are to his detriment, he can resign and claim constructive dismissal.
Automatic unfair dismissal
Any dismissal of an employee with the necessary qualifying period of service (which is one or two years, depending on when he started work), will be automatically unfair if the reason for the dismissal was the transfer or a reason connected with it. There is a defence in limited circumstances, but employers need to tread carefully, as it is easy to get it wrong.
Obligation to inform and consult
Both old and new employers need to give prescribed information about the transfer and its implications to trade union representatives, or representatives elected by the employees if there is no recognised union. If an employer intends to take any “measures” in connection with the transfer, which broadly means any changes that may affect the employees, it must also consult with the representatives with a view to seeking their agreement. A failure to inform or consult can be very expensive, as an employment tribunal can award up to 13 weeks’ actual pay for each affected employee.
Employee liability information
The old employer must provide the new employer with certain information about the employees at least 14 days before the transfer date. A failure to do so gives the new employer the right to bring a claim in the employment tribunal for a minimum of £500 per employee.