Guide to transferring staff OUT on TUPE

Step 1

Determine whether TUPE applies

As soon as you become aware that there is a potential for part or all of your organisations operations to be transferred to an external organisation, irrespective of the size of the operation and the number of individuals assigned to the operation, you will need to assess the possibility that the transfer will be covered by TUPE.

It is essential that this is established early, not only to ensure that all legal duties arising from TUPE are actioned in advance of the transfer taking place, but also to ensure that you gain the confidence and co-operation of the staff that may be transferring out.

The application of TUPE depends on the particular circumstances of each case. Generally, it will be wise to assume that the regulations apply to any transfer.

Step 2

Establish which employees are affected

Having established that TUPE applies you will need to decide which employees will have the protection of the regulations.

The regulations apply to all employees, including those employed on a part-time basis and those employed on fixed-term or temporary contracts. The TUPE Regulations define an employee as any individual who works for another person whether under a contract of service or apprenticeship or otherwise but does not include anyone who provides services under a contract for services. Individuals who provide services under a contract for services, for example, the self-employed, consultants, or agency workers, are not covered.

Only employees employed by the entity immediately prior to the transfer and in the specific area concerned will have protection under the regulations and will transfer.

You will first need to identify those employees who are permanently assigned to the specific work of the department which is transferring. This can involve detailed examination of the contracts of employment, job duties and what actually happens in practice. You should also include any staff who are absent, for example on extended sick leave, unpaid leave, or maternity leave. Employees who are temporarily assigned to the specific work of a department that is transferring, for example through a secondment arrangement, will not transfer if their work normally connects them to another area of the organisation.

There are four factors which are relevant in determining whether employees are assigned to the part of a business which is transferring:

1. the percentage of time the employee spends in the undertaking
2. the contribution he or she provides to that part of the business
3. what duties he or she is contractually required to perform, and
4. who pays the employees salary

You should therefore compile a definitive list of all employees whom you believe would be transferred and who would, therefore, require action as specified below.

Step 3

Inform affected employees

Affected employees include:

• those transferring from the old employer to the new employer
• those staying employed with the old employer but whose colleagues will transfer out
• those already working for the new employer, whose work will be affected by the staff transferring in

Notiification of the possibility of a TUPE transfer - model letter

Step 4

Consult with representatives

There is a statutory duty to consult and inform appropriate representatives prior to the transfer taking place. Failure to comply with this regulation could result in a complaint to an Employment Tribunal, which if upheld could result in compensation for each affected employee.

The appropriate representatives will normally be either the recognised trade union representatives for the affected staff groups, or directly elected staff representatives.

In organisations with fewer than 10 employees, if there is no recognised trade union or authorised staff representatives, you could either arrange an election with the affected employees to vote for representatives, or consult directly with every affected employee.

In organisations with more than 10 employees, if there is no recognised trade union or authorised staff representatives, employers must arrange elections with the affected employees to vote for representatives to consult about the transfer.

Notification of intention to hold an election - model letter

Notification of ballot - model letter

Consultation is the provision of a reasonable opportunity to influence developments and proposals. It is essential that the representatives are informed of a possible transfer at the earliest opportunity to enable representations to be made and properly considered and an appropriate reply provided.

The consultation timescale should be appropriate to the circumstances and much will depend on factors such as the number of employees affected by the transfer, its complexity and whether there are any other implications for the transferring employees such as changes to their work location, hours or duties.

It is recommended that consultation should normally commence 13 weeks prior to a proposed transfer date. However, it is important that discussions take place at the earliest opportunity, as soon as the facts indicating a transfer emerge, allowing sufficient time to enable the consultation process to have been fully and fairly completed in advance of the transfer taking effect. Consultation should be undertaken with a view, wherever possible, to reaching agreement. Representatives should, of course, be kept informed of progress throughout the transfer process.

The basic information which must be provided to representatives is:

• The fact that the transfer is to take place
• The approximate date of the transfer
• The reasons for the proposed transfer
• The legal implications of the transfer on affected employees, including an explanation of the legal effect on contracts, statutory rights and collective agreements.
• The likely economic and social effect of the transfer on employees. In these circumstances economic effects include any effect on pay or other benefits and social effects include matters such as relocation.
• Any measures which the new employer envisages taking in relation to the affected employees, such as changes to working patterns or work location.

This information can be conveyed in meetings with representatives but regardless of whether or not the information has been conveyed orally it must always be delivered to each of the representatives in writing.

It is important that the first information for employees is provided by the department and not by staff representatives. In appropriate circumstances you may, therefore, wish to ask the unions or employee representatives to maintain confidentiality until such time as employees have been informed of the possibility of transfer.

TUPE measures - model letter

TUPE consultation confirmation (to reps) - model letter

Step 5

Consult with affected employees

The duty to consult affected employees is separate from the duty to consult representatives, although in practice they will overlap. As the old employer you should ask the new employer for information about the transfer so that you can consult your staff properly. The basic information that should be made available to the affected employees is identical to that detailed for their representatives in Step 4 above.

Consultation with affected employees will be with a view to reaching agreement and any representations from the affected staff should be fully considered, responded to, and, if they are to be rejected, reasons provided.

There is no legal requirement to consult with individual employees in addition to group consultation. However, individual discussions will be essential if it is proposed that any changes be made to an employees working arrangements, such as working patterns or place of work, in order to provide an opportunity to gain agreement to such proposals and overcome any resistance to them. In addition individual discussions might enable you to provide those who are anxious about the implications of the transfer but who feel unable to express this in group consultation with an opportunity to have their concerns addressed on a more personal basis. If you are able to take this approach you will need to allow sufficient time when calling meetings for individuals to arrange to be accompanied if they so wish. As with group consultation it will be helpful if the new employer is represented at meetings with individuals.

The involvement of the new employer in both group consultations and individual consultations is particularly important as the transfer date approaches as some important employment details will need to be shared to ensure, for example, that the employee is paid correctly after the transfer.

Step 6

Confirm the transfer with affected employees

Once the arrangements for the transfer are confirmed, following the completion of the consultation exercise, the old employer will need to confirm the details in writing to all affected employees and their representatives.

TUPE transfer confirmation (to representatives) - model letter

TUPE transfer confirmation (to employee) - model letter

Once the affected staff and their representatives have been informed that the transfer is confirmed, it is recommended that opportunities are made available to discuss the implications with the employees concerned.

Step 7

Exchange employee data

As the old employer, you will need to make the new employer aware of which employees will be transferring out and provide them with all the relevant employment details. Such information is essential if the new employer is to prepare for the employment of the transferring staff and familiarise themselves with their terms and conditions of employment, which will transfer with the staff.

This exchange of employee information must be carried out in compliance with the requirements of the Data Protection Act 1998. The Information Commissioners Code of Practice on Employment Records sets out certain standards to be met in relation to the handling and disclosure of employee data during transfers. The information should be kept secure, disclosed only to the appropriate individual(s) and used only for specific purposes associated with the transfer. In the early stages of discussions about a possible transfer it is suggested that information is provided in such a manner as to avoid the identification of individuals. However, after the transfer employment records can be transferred but it is advisable to give the transferring employees the opportunity to check that the information held is accurate and obtain consent to the transfer of their individual employment data. A template letter is provided for this purpose.

These actions will ensure that the standards set by the Data Protection Act will have been met. It is also recommended that an assurance that employee information will be handled in accordance with the Act is obtained in writing from the new employer prior to the exchange of information. The letter used should set out the purpose and limitations to the exchange of information and will remind the new employer of these statutory obligations.

TUPE information consent request - model letter

Having obtained the necessary consent you will need to make a list of all employees who will be transferring and their employment details. A data sheet for this purpose is provided; this will also serve as a checklist for you to ensure that all relevant information is passed on to the new employer.

The list of employees, along with copies of their contracts of employment, should be passed on to the new employer who will be obliged to maintain all the specified contractual rights. You should issue this information in conjunction with the pro-forma letter provided.

Step 8

Confirm the date of transfer

When arrangements for the transfer are complete and the date of transfer is confirmed you should notify employees of the date when their employment with you will cease and of the final arrangements for effecting this.

TUPE transfer goodbye - model letter