TUPE

If your business is undergoing a sale or other transfer of shares or assets, or if you are acquiring all or part of another business, or if you are outsourcing or insourcing, won or lost a contract the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) will often be a critical issue in the transaction.

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The legislation is complex and technical, and may not apply in every case, but legal input at an early stage is key in protecting your business against potential claims.

Where TUPE applies, it may provide protection to affected employees and preserve their employment during any transfer. There will also be other legal obligations on you as their employer, such as a duty to inform and consult with any employees that may be affected. TUPE is often misunderstood to apply only to large operations, but it can apply to small businesses and even if there is only one employee.

Unfair dismissal claims arising from TUPE are common. For example, in 2019/2020 562 claims were brought in the Tribunal against employers who failed to inform and consult with their employees about a TUPE transfer. While not all of these claims will have been successful, defending Tribunal litigation is costly both financially and in management time. Input from legal advisers early on in any transaction can help mitigate the risk of subsequent claims.