Redundancy in a TUPE transfer

Views: 3,094

Share this article...

TUPE will impact who pays for any redundancy.

The whole point of TUPE is to protect the rights of all employees involved in the transfer, so all employees transfer automatically with all their terms and conditions intact, including length of service. Any dismissal in connection with a TUPE transfer is automatically unfair, unless there is an “economic, technical or organisational reason entailing changes in the workforce” for the dismissal.  Redundancy might be such a reason.

Does TUPE protect from redundancy?

TUPE protects employees from any dismissal in connection with a TUPE transfer, in that all dismissals connected with a TUPE transfer are automatically unfair unless there is an “economic, technical or organisational (ETO) reason entailing changes in the workforce” for the dismissal.

So, no, TUPE doesn’t prevent redundancies.

How does TUPE affect redundancy?

TUPE will affect who is responsible for paying the sums due on redundancy.  This will usually be notice pay, accrued holiday pay and statutory redundancy (due if you have more than two years’ service). So, if you’re made redundant after a TUPE transfer, the new employer will be responsible for redundancy payments.

However, if you’re made redundant before a TUPE transfer, your current employer will be responsible.  That said, if your current employer makes you redundant because the incoming employer wants them to, then that would be an unfair dismissal – your current employer can’t rely on the incoming employer’s reason to make you redundant. You should transfer over, and the new employer should deal with any redundancies, assuming they have a fair reason to make redundancies.

Can I be made redundant after a TUPE transfer?

Yes.  An employer is able to dismiss their employees at any time – the question is whether the dismissal is fair, unfair and/or discriminatory or in breach of TUPE.

So, in the case of a redundancy after a TUPE transfer, it will depend on whether there is a genuine redundancy situation and whether that amounts to an “economic, technical or organisational reason entailing changes in the workforce”.

The new employer can consult about redundancies prior to the transfer if the old employer agrees. However, the redundancies can’t (fairly) go ahead until after the transfer if they are connected with the transfer and are due to the incoming employer’s reason. Also, the new employer might need to consult with all affected employees (both those that are transferring and the new employer’s existing employees).

TUPE stands for Transfer of Undertakings (Protection of Employment).

Can you be made redundant before a TUPE transfer?

Yes (again) – an employer can dismiss employees at any time.  The question is whether the dismissals are fair or unfair or discriminatory.

Where a business is preparing to sell, redundancies might be made to make the business leaner and more attractive to buyers.  If this is just part of the early process, well in advance of a sale (perhaps before a buyer has been identified, or even before buyers have been sought), then redundancies won’t be “connected to” a TUPE transfer.  In turn, that means the additional TUPE protections won’t apply.  It’s just a “normal” redundancy and we’d look at whether there is a business rationale for redundancies, and whether a fair consultation process has been followed.

If you are made redundant in connection with a TUPE transfer, by your current employer, and before the transfer takes place, then it’s important to consider whether it is an automatically unfair dismissal.

Who pays redundancy under TUPE?

The employer who dismisses is responsible for making all termination payments to their employees, including notice pay, accrued holiday pay and statutory redundancy pay where due.

Often, old and new employers will agree between themselves as part of the terms of the deal, that one or other will cover termination costs.  For instance, the buyer may be asked to pay termination costs if they insist that the seller makes redundancies prior to the transfer. Or the seller may want confirmation that the buyer won’t seek reimbursement of termination costs – or drag the seller into any employment claims – if they make redundancies after the transfer.

How long are you protected after TUPE?

The protection given by TUPE, such as protection against dismissal or the imposition of changes to your terms and conditions of employment, applies for an indefinite period after a transfer.  There is no limit in time for which you can claim that your dismissal was “in connection with” a TUPE transfer. You’d have to show that it was connected, and that can get harder the more time has passed.  But it’s not impossible.

Employment Law Solicitor

If you need more help with the subjects covered here then do reach out to our expert solicitors.  You can speak to our employment solicitors online via email or call us on 03300 020 863.

Share this article...