When all or part of a business is bought or sold, or a service is in/outsourced, this will normally be covered by The Transfer of Undertakings (Protection of Employment) Regulations 2006 etc, (referred to as TUPE). The purpose of these regulations is to protect the rights of employees who are transferred to a new employer when a relevant transfer takes place
This page might be useful to you if:
- You are a manager with responsibility for a service where employees are joining or exiting the Council under TUPE.
On this page you can find a summary of the TUPE Guidance for Managers.
The decision on whether TUPE applies to a transfer of undertaking must always be based on legal advice. The Director of each service is responsible for all TUPE transfers in their service area. Advice must be sought from Legal Services and Human Resources at the earliest possible stage on every occasion when TUPE may be relevant.
1. Who is Covered by TUPE?
All employees of the Council, including those on fixed term contracts, and employees who are absent from work for reasons such as sickness, maternity, paternity or special leave (not an exhaustive list).
2. Statutory Issues
TUPE legislation means that the new employer assumes all rights, powers, duties and liabilities in connection with the employment contracts of the employees who are transferring.
Trade Unions of affected employees must be informed and consulted on any measures to be taken. Any dismissal where the reason for the dismissal is the transfer itself will normally be automatically unfair.
3. TUPE Terminology
A transfer of undertaking/relevant transfer – where a business is sold as a going concern. TUPE may also apply where concessions or franchises are created or terminated or where two businesses merge.
Service Provision Change – TUPE Regulations also provide protection to employees involved in the outsourcing, re-tendering or in-sourcing of services. A service provision change takes place when there is an organised grouping of employees (it can also be just one person), which has as its main purpose the provision of a particular service to a client. If the client then changes its service provider and the service provision is fundamentally the same as the activities carried out previously, TUPE will normally apply.
Transferor – is the employer of the employees immediately before the transfer
Transferee – is the employer immediately after the transfer – this applies both to transfers of an undertaking and to service provision changes
4. Management Responsibilities
- Identify which employees will be affected by the transfer. If just part of an undertaking is to transfer, only those employees dedicated to that part of the undertaking will transfer. Consider the amount of time that each employee spends in the part of the undertaking that is being transferred, and the employee’s job title, job profile and particular duties, in order to assess whether they will be a transferring employee.
- Committee approval is required before progressing with the TUPE transfer in all cases. Consultation should take place in line with the normal Committee Reporting procedure
- Inform and consult with Trade Unions and provide them with the necessary written information about the transfer. While the duty is to consult with employee representatives, it is good practice to inform and communicate with all affected employees regularly throughout the process.
5. Information and Consultation
Both the existing and new employer have a duty to inform and to consult representatives of their affected employees. Those affected employees might include:
- those individuals who are to be transferred;
- their colleagues in the transferor employer who will not transfer but whose jobs might be affected by the transfer; and
- their new colleagues in employment with the new employer whose jobs might be affected by the transfer.
You will need to think about the impact and implications of a transfer in or out of the service and whether a service redesign needs to be considered.
Information must be provided long enough before the relevant transfer to enable meaningful consultation to take place.
Before the consultation process begins, the Trade Unions must first be informed:
- that the relevant transfer is to take place, the date or proposed date and the reasons for it;
- of the legal, economic and social implications of the transfer for the affected employees;
- any measures the employer envisages taking in connection with the transfer, in relation to any affected employees, and if no measures are envisaged, that fact.
- If the employer is the transferor, the measures which they envisage the transferee will take in relation to any affected employees, or if they envisage no measures, that fact. The new employer must give the transferor employer the necessary information so that the transferor employer is able to meet this requirement.
6. Providing information to the Transferee
The transferor employer must provide the new employer with specified information which will assist in the understanding of the rights, duties and obligations in relation to those employees who will be transferred. This information is:
- the identity of the employees who will transfer;
- the age of those employees;
- information contained in the “statements of employment particulars”;
- any collective agreements and Council policies which are part of the contract of employment;
- any disciplinary action within the preceeding two years taken by the transferor;
- any grievances raised by those employees within the preceding two years;
- information of any Court or Tribunal case, claim or action brought by those employees against the transferor in the previous two years and any potential legal actions which may be brought by transferring employees.
- any collective agreement which will have effect after the transfer.
The list of information should include employees who were assigned to the grouping being transferred and who have been dismissed for an economical, technical or organisational reason entailing changes in the workforce and where the reason for the dismissal is the transfer.
The information should be given at least 28 days before the date of the transfer.
If any of this information changes before completion of the transfer, the transferor is required to give the new employer written notification of those changes.
Employees’ consent is not needed before passing on the above information about them to the transferee, although the transferor must consider the implications of the Data Protection Act 1998 when disclosing information in the context of a TUPE transfer. Signed Consent must be obtained from the individual before information is disclosed relating to their payroll history, pension details and bank account details.
The Employment Practices Data Protection Code recommends that wherever practicable transferors should ensure that the information provided is anonymised, and that workers are advised that their employment records are to be disclosed to another organisation before the TUPE transfer takes place.
7. Pension Arrangements
Employees leaving the Council as a result of TUPE
The employing Service must contact the Pensions Section with names of the employees who may be transferred.
Potential transferees would bid on one of the following basis:
- “admitted body status”: The Council would act as Guarantor in the event that the admitted body should cease to exist. If approved, this would mean that transferring employees remain part of the LGPS and would see no real change.
In cases whereby the transferee is seeking admitted body status, the Council’s employing Manager should liaise with the Pensions Section, who would then prepare reports to go to the relevant Council Committee and to the Pension Panel. Providing these arrangements were approved, the Legal team would prepare an Admission Agreement, which would require the signature of contractor, employer and Aberdeen City Council as the Administrators of the Pension Scheme.
- Alternatively, the transferee would need to offer a broadly comparable pension scheme. The transferee would be required to submit a copy of the appropriate pension booklet which would be checked by the Actuary.
Employees joining the Council under TUPE
Similar rules would apply to employees joining the Council under TUPE. If the transferring employees are not already members of the LGPS, the scheme from which they are transferring must be broadly comparable. It does not require to be the same in all aspects but generally must be comparable and the previous scheme’s booklet should be provided. The Council would then have to pay the costs of gaining a certificate from the Fund Actuary to confirm that the LGPS is comparable to the previous scheme. In instances whereby the existing scheme is significantly different, for example non contributory or with a different retirement age, these issues would need careful discussion under the agreement. It would be likely that the transferring employees would need to either freeze their benefits under their existing scheme and join LGPS or look into the possibility of transferring their existing pension amount into LGPS, with all future contributions etc under the terms of the Council’s scheme.
8. Auto enrolment
Automatic enrolment does not affect the TUPE rules. However, where a receiving employer is already subject to the duty to automatically enrol, they will have to automatically enrol all eligible transferring workers.
Transfer of Employment
Employees employed in the business immediately before the transfer automatically become employees of the new employer. If an employee objects to being transferred the contract of employment with the Council is terminated by the transfer of undertaking. This would have the same effect as if the employee had resigned. The Council’s Managing Redeployment Policy is not applicable in a TUPE situation. Employees are free to apply for any Council vacancy through the normal recruitment process.
Relevant Documents and Letters
- Checklist for Employees In
- Letter ACC TU Reps Transfer In
- Checklist for employees out
- Welcome in to ACC Letter
- Letter Requesting Measures
- Letter TU Transfer Out
- Letter Employees Tranferring Out
- Letter for Consent of Transfer of Personal Data
- Letter for Deduction of Car Loan Repayment
- Letter for Deduction of Childcare Voucher Payments
- Letter for Deduction of Hardship Loan Repayments
- Letter for Deduction of National Dental Plan Payments
- Letter for Deductions of Credit Union Payments
- Letter for Deductions of Rent
Click here to return to the main Employee Relations page
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