When a business or service is taken over by a different organisation, the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) could apply so that employees automatically move over to the new organisation. There are some changes on the way which will impact who businesses will need to speak to in the lead-up to the transfer.

Inform and consult

Before a transfer takes place, affected employees must be informed and, where applicable, consulted with about the transfer. If there is a recognised trade union, then they must be engaged for this purpose.

If not, then employee representatives will need to be elected. Employees, therefore, should be invited to stand for election as a representative and then a ballot should be organised so that affected employees can vote on who they want to elect as their representatives. The business will then inform and consult directly with the elected representatives.

However, if it’s a micro business – an organisation that has less than 10 employees in the whole organisation – and there is no trade union recognised, then employees can be informed and consulted with directly, so it avoids the need to elect representatives.

What is changing?

From 1 July 2024, the circumstances when a business can inform and consult directly with an employee will be expanded. This is because the requirement to inform and consult with elected representatives, where none already exist, will be removed:

·       For businesses with fewer than 50 employees; and

·       For businesses of any size when a transfer affects fewer than 10 employees.

On the one hand, this might be good because the process of electing representatives does not have to be followed. On the other hand, if employees are being engaged individually, then this could take more time in having to arrange and speak with them separately.

Check out BrAInbox for instant answers to questions like:

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More change could be on the way

The Government has recently launched a consultation seeking views on making even more changes to the TUPE rules. It proposes to change the law:

·       To confirm that TUPE only applies to employees and not workers – this is because a recent Employment Tribunal case created uncertainty in this area.

·       To remove the obligation to split employees’ contracts between multiple employers where a business transfers to more than one new business.

The consultation ends on 11 July 2024 and usually the Government will then consider the responses received. Given that the Prime Minister, Rishi Sunak, has called the General Election for 4 July 2024, what happens next will depend on who wins and what their plans are.      

There are lots of rules around what both the old employer (transferor), and the new employer (transferee), must do before the transfer takes place. We have specialised HR Experts who can advise you, step by step, about what you need to do if the situation arises.