Step One: determine whether TUPE applies
As soon as we become aware that there is a potential for part of the departments operations to be transferred to an external organisation, irrespective of the size of the operation and the number of individuals assigned to the operation, we 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 we 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 Two: establish which employees are affected
Having established that TUPE applies we 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. TUPE defines an employee as an individual who works under a contract of employment or apprenticeship. So 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 department immediately prior to the transfer and in the specific area concerned will have protection under the regulations and will transfer under TUPE. We will first need to identify those employees who are permanently assigned to the specific work of the department which is transferring. This may not be as simple as it seems and can involve detailed examination of the contracts of employment, job duties and what actually happens in practice. We should also include in this exercise 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.
The courts have identified four factors which are relevant in determining whether employees are assigned to the part of a business which is transferring:
- the percentage of time the employee spends in the undertaking,
- the contribution he or she provides to that part of the business,
- what duties he or she is contractually required to perform, and
- who pays the employees salary.
Referring to the factors above, we should compile a definitive list of all employees whom we believe would be transferred and who would, therefore, require action as specified below.
Step Three: consult with representatives
Under the TUPE regulations there is a statutory duty to consult and inform both "affected" employees and the 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 of up to 13 weeks pay for each affected employee. The appropriate representatives will normally be either the recognised trade union representatives for the affected staff groups, or, in certain circumstances, directly elected staff representatives.
Consultation is interpreted by the courts to mean the provision of a reasonable opportunity to influence developments and proposals. It is therefore 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. If representations are to be rejected reasons must be provided as to why this is the case.
There is no regulated timescale for the consultation process; timescales 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