TUPE – five key pointers

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One key question that keeps coming up about TUPE is how to pronounce it. Some people like to say ‘toupay’, but PES HR advisers confirm that this sounds like a hairpiece and could be confusing.

Better instead to think about Shakespeare’s most famous line. Change one consonant and this could be the dilemma faced by modern employers. TUPE or not TUPE? That is the question – and our HR experts have the answer.

Two types of TUPE

The Transfer of Undertakings (Protection of Employment) Regulations (to give it its full description) may affect you if you’re selling your business, transferring part of it elsewhere, or bringing in a service from another company.

The chances are you’ll focus on the financial implications first – after all, it’s important that the numbers stack up. But somewhere further down the line your attention will turn to the people involved. Which employees are leaving your business, or being brought in? Does TUPE apply? And if so, what does that mean? Now you’re entering the complex world of TUPE transfer.

The CIPD has recently published new guidance on TUPE. The regulations apply in two broad categories:

  1. Business transfer (the sale of a business to another owner).
  2. Change in service provision.

A change in service provision could be:

  • outsourcing part of what you do to another organisation
  • bringing a service in-house from another employer
  • changing contractors who provide a service to you.

In each case, people will find themselves working for another employer but doing the same job. TUPE means that their terms and conditions of employment must stay the same and they can’t be dismissed just because of the transfer.

Five things to think about

At PES, we believe it’s vital to put people at the heart of complex business transactions like these. Not just because we’re committed to delivering a positive employee experience, but because failure to do so could lead to costly mistakes.

For example, employers could be asked to pay up to 13 weeks’ salary for every employee affected if the consultation part of the regulations are not followed properly.

So when people are transferred to a new employer (either transferred out from your organisation, or transferred in from another), here are five things to think about.

  1. Include consultation in your process. Everyone affected has a legal right to be consulted on proposed changes to their employment. For TUPE this also means ensuring that elected employee representatives (or recognised Trade Unions) are consulted as well – even if you don’t have them, they have to be elected for this.
  2. Consider the service implications. Organisational change like this is stressful for employees while it’s going on. This could affect the service your clients receive, and therefore your profitability or reputation.
  3. How will if affect employee wellbeing? Making sure employees are adequately supported will not only help to keep service levels high, it will also minimise the possibility (and cost) of stress-related absence.
  4. What changes will you need to make to maintain incoming employees’ contractual rights? For example, will you need to adjust or increase your employee benefit offering?
  5. Plan ahead. Don’t leave the people considerations until last. Bring in a reputable HR adviser to guide you through the process and help you develop a plan that covers all these points.

For small to mid-sized businesses, managing these interrelated aspects of TUPE can be daunting. But at PES, we can help you not just with expert HR advice, but with employee benefits and wellbeing support as well.

One of our clients transferred in a number of staff who had life assurance with their previous employer. While our HR team supported the TUPE transfer process, our regulated subsidiary PES Health quickly sourced appropriate, cost-effective life assurance.

TUPE is not particularly straightforward. There is a lot of case law surrounding the legislation, and sanctions for failing to follow it can be punitive. Having a business partner who can handle the HR, employee benefits and wellbeing aspects of the process is reassuring as well as cost-effective. (And pronunciation advice is completely free of charge.)

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About PES

Delivering a great employee experience is a challenge for growing organisations. At PES, it’s what we do. Our online employee benefits platform, HR support and workplace wellbeing services bring out the best in your employees – enabling your business to thrive.

Call us on 01454 808658, email us at hello@wearepes.co.uk or fill in our enquiry form.