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TUPE or not TUPE, that is the question. Okay, so it’s not Shakespeare.

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TUPE

TUPE or not TUPE, that is the question. Okay, so it’s not Shakespeare.

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What actually is TUPE?  And no it’s not a wig…. that’s a toupee.

TUPE stands for the ‘Transfer of Undertakings for the Protection of Employment’. Bit of a mouthful, really. All joking aside it’s something you need to be aware of as a business owner if you’re looking to grow your business through acquisitions.

Acquisitions can be a quicker way to grow your business.  You may want to acquire the business for their client base, product or assets.  If that’s the case then you don’t need to worry about TUPE. But if you’re actually taking on the employees who work for the business then it is 99.9% most likely that TUPE will apply to you.

You also need to consider TUPE if you are outsourcing services.

Say for instance you have a payroll team and you want to outsource the payroll, the then the current employee will most likely transfer under TUPE.  Often people will outsource services because they haven’t managed the employees and they are under performing or to reduce costs. But it’s most likely that when you outsource you will end up with the same people carrying out the work. That’s something to think about if you’re outsourcing.

If you are looking to acquire a business, you will need to transfer the employees over to you. Many employers are not aware that they must do this.  It can be very complicated, and costly, its important you get it right. Seek HR advice from an expert.

There are many things you need to take into consideration when looking at TUPE transfer.

Employees will transfer over under the same terms and conditions, you can’t reduce their salary, hours of work, or change their position and they will keep their continuous service date.

However, there are ways around it. You can introduce and consult around something called ‘measures’. You need to make sure that staff representatives are elected and that you inform and consult with the representatives.

Now a lot of employers don’t want to do this, and they will try everything they can not to go through this process. If that’s what you want to do, that’s your choice, but it can be a very expensive mistake. If TUPE is actually found to apply and you didn’t follow the process then be prepared to get your cheque book out!

My advice is always, if you’re taking over a business and you’re not sure whether TUPE applies, is to seek HR advice, (I know just the person, you can contact me).

If you’re not sure if TUPE applies or not, the best thing to do is treat it as though it is a TUPE transfer. If it turns out it’s not, then it doesn’t matter, but if it turns out it is and you didn’t follow the process, you will need your cheque book.

If you don’t follow the consultation process with employees, the employee is entitled to claim is 13 weeks actual pay for lack of consultation or failing to consult.  That’s 13 weeks actual pay for every employee who is affected by the transfer, so if you want to pay out all that money, then that’s your choice.

If you’re thinking of acquiring a business, if you want some information about TUPE, then contact me, The People Doctor. It’s complicated but don’t worry I can guide you through the process.

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