Transfer Undertaking Protection of Employment (TUPE)

Transfer Undertaking Protection of Employment (TUPE). Is it a grey area of Employment Law?

Transfer Undertaking Protection of Employment (TUPE) is a pivotal part of employment law and yet most employment solicitors would probably agree is one area of the law that is most grey. Owing much of its origin within the contract cleaning industry it has widely established a precedent across most employment sectors.

What is TUPE?

TUPE protects the rights of employees who work for a company or organisation that has been taken over by another organisation or merged with another company. TUPE basically says that the employment rights of all employees must remain the same, their salaries cannot be changed for example or their pension rights or redundancy rights cannot be altered by the organisation that is buying the other company. This also works for local authorities and organisations who take service contracts over.  So a contract cleaning company for example taking over a cleaning contract for a local council have to keep the staff with the same employment rights.

Is TUPE Fair?

This is where most employment law specialists would probably be undecided. On the one hand TUPE stopped unscrupulous companies just carrying out cost cutting exercises by sacking good, hard working staff and replacing them with cheaper labour. Under TUPE regulations this cannot happen, however on the other hand staff who are not performing and cause companies to lose contracts because of a breach of service level agreements are simply transferred to the new organisation with the same employment rights.

In these circumstances neither party wins, the company taking over the contract inherits poor staff and the organisation trying to gain an improvement on the service it is paying for still has the same staff performing their duties poorly.

As with many areas of the law the intent is good however in practice further precedents need to change the way TUPE works. TUPE does seriously favour the employee who transfers to the new organisation with exactly the same rights including salary rights, pension rights redundancy rights.

In our discussion it would appear that TUPE is very black and white when in reality due to other areas of employment law it is in fact an incredibly grey area of the law and has probably given rise to more unfair dismissal and constructive dismissal tribunals than any other area of the law.