TUPE and TUPE+

TUPE: an introduction

The Transfer of Undertakings (Protection of Employment) Regulations (TUPE) is a law designed to protect the rights of employees when a business transfers from one owner to another.

This means that if your organisation or part of your organisation changes from one owner to another, your employment terms and conditions (save in respect of occupational pension schemes) are protected and you automatically become an employee of the new employer.

If you work in the public sector and you are transferred to the private sector, you are covered by TUPE.

TUPE also covers service provision changes where a person ceases to carry out activities on their own behalf and instead the activities are carried out by another person on their behalf (or in reverse). Under changes to TUPE introduced in early 2014, activities carried after the change in service provider must be fundamentally the same as those that were carried out by the person who ceased to carry them out.

This service provision change is sometimes known as contracting out or outsourcing. It also covers situations where outsourcing has already occurred but there is a change in the contractor carrying out those services.

TUPE does not however cover changes in company ownership. If you remain employed by the same company, there has not been a TUPE transfer, even if ownership of the company has changed.

TUPE Plus (TUPE+)

TUPE + is not a legal term and is a phrase sometimes used to refer to additional protections that may be available to staff transferring from the public to private sector.

TUPE+ helps combat the emergence of a two-tier workforce, where new employees have less favourable conditions and pay than employees transferred from the public sector. Read more about two-tier workforces

Under the Code of Practice on Workforce Matters in Local Authority Service Contracts 2003, new recruits:

• had pay and conditions which were overall no less favourable than transferred staff;
• had the right to membership of the local government pension scheme, membership of a good quality employer pension scheme or membership of a stakeholder pension scheme under which the employer would match employee contributions up to at least 6%.

However the 2003 Code of Practice was revoked with immediate effect on 23 March 2011, although it continues to have effect with regard to contracts entered into before that date. The code has been replaced by a voluntary statement of “Principles of Good Employment Practice for Government, Contracting Authorities and Suppliers”.

This merely provides that “Where a supplier employs new entrants that sit alongside former public sectors workers, new entrants should have fair and reasonable pay, terms and conditions. Suppliers should consult with their recognised trade unions on the terms and conditions to be offered to new entrants.” Pensions are not specifically mentioned.

TUPE+ also aspires to include the following fair employment policies, achieved by unions negotiating with the employer:

• variation to conditions of service should only be introduced following a collective agreement with a trade union;
• new recruits will be on the same/very similar terms and conditions.
  Read more about collective agreements

When may TUPE apply?

Public sector employees are sometimes transferred to the private sector when the following circumstances take place:

• outsourcing – a public sector function or service is contracted out to a company;
  a Public Private Partnership (PPP) – public sector organisations and private sector companies work together;
• privatisation – ownership of a public sector organisation is transferred to a private company.
• Depending on how the change is structured, TUPE may apply. It will not apply where the employees remain employed by the same company, even if ownership of the company changes.

TUPE and service provision changes

A service provision change happens when an employer outsources (contracts out) a service. For example, a local education authority outsources school meals to a private company which it previously provided using its own employees.

It also covers situations where outsourcing has already occurred but there is a change in the contractor carrying out those services or when a company decides to bring the service in house.

Again, the service must be fundamentally the same as those carried out before the change.

Service provision changes are common, particularly in work contracts for catering, cleaning or security.

If you are employed by a large company which decides to use an outside company to organise the work, your job and employment terms and conditions could be protected under TUPE except when the contract is:

wholly or mainly for the supply of goods for the company’s use;
when the service carried out is for a single event or for a task of short term duration.

What should employers do?

Employers are required to provide representatives of employees affected by transfers of ownership with specific information about a proposed TUPE transfer sufficiently in advance to allow voluntary consultation to take place.

If the employer of any affected employee envisages taking measures in respect of that affected employee, they must consult with the representatives of that employee with a view to reaching agreement with the affected employee in respect of the intended measures.

Employees who object to being transferred should write an objection letter as early as possible. If the employee objects they will not transfer but their contract of employment with their existing employer may, subject to certain conditions, be treated as terminated without the employee being regarded as having been dismissed. This would leave the employee without a job but unable to claim unfair dismissal.

Employers may provide employment counselling for employees affected by the transfer.

Next steps for UNISON representatives

If you think there are differences in pay and conditions among workers doing similar or identical jobs in your workplace, you could use UNISON bargaining support tools, which are available online.

The majority of staff working for private contractors, who are not protected by TUPE, have minimal overtime pay and lack the benefits other TUPE-protected employees enjoy, such as sick pay in addition to statutory sick pay. You can help these staff by submitting claims to highlight the difference. Use the claim to organise and recruit contracted employees and raise awareness of the problem.