Transfer of Undertakings (Protection of Employment) Regulations 2006
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) known colloquially as TUPE and pronounced , are the United Kingdom's implementation of the European Union Transfer of Undertakings Directive. It is an important part of UK labour law, protecting employees whose business is being transferred to another business. The 2006 regulations replace the old 1981 regulations (SI 1981/1794) which implemented the original Directive. The law has been amended in 2014 and 2018, and various provisions within the 2006 Regulations have altered. Purpose. The regulations' main aims are to ensure that , in connection with the transfer, employment is protected (i.e. substantially continued). These obligations of protection are placed on the transferring companies both before, during and after the transfer. The obligations are relieved if there is an "economic, technical or organisational" reason for the cessation of employment (Regulation 7(1)(b)), or alteration to employees terms and conditions (Regulation 4(4)(b)). This does not apply to transfers which go merely through the sale of a company's shares (a "share sale"). When that happens, because the employer (i.e. the original company) remains the same legal entity, all contractual obligations stay the same. The directive  and regulations apply to other forms of transfer, through the sale of physical assets and leases. The regulations also apply in some cases for work transferred to contractors. This protected contract terms for workers include hours of work, pay, length of service and so on, but pension entitlement is excluded. Example. Imagine a company that has in-house cleaners. The company decides that they want to tender-out the contract for cleaning services. The new company that takes over the work may employ the same cleaners. If it does so, TUPE will make it likely that the" new" employer will  have to employ the cleaners subject to the" same "terms and conditions as they had under the "original" employer. If any staff are dismissed by either employer for a reason connected with the new arrangement this will automatically be deemed an unfair dismissal and the new employer will be liable for any statutory claims arising as a result. This is also the case where a target business (as distinct from shares in a company) is bought from company A by company B (often much larger) and integrated with the business of company B. Evaluation. The benefits to individual workers are  clear; TUPE prevents the possibility of everybody in the firm losing their jobs, just because the company providing the service changes. This gives employees increased certainty. A side-effect of the new regulations could prove unfortunate for some employers. This has been particularly highlighted in connection with law firms. According to the Law Society's magazine, "The Law Society Gazette", law firms might be forced to employ teams of lawyers when taking over contracts. Under the new rules, if a client decides to source their legal work from a different provider, the legal team from the old provider would be  entitled to transfer to the new provider under the same terms and conditions as before; if the new provider were to object, the new employees would be entitled to sue for unfair dismissal. Dr John McMullen, an expert on TUPE, is quoted as saying: "If you had an organised grouping of solicitors at a law firm devoted to one client, and that client said 'I do not want this law firm, I will appoint law firm X', then TUPE 2006 could apply so that—contrary to what the client is expecting or wanting—it may find that the lawyers would  have the right to turn up at the newly appointed law firm. The definition of 'organised group' can be just one person." Objections to the new regulations had been raised during consultation. An exemption for professional services firms had apparently been mooted by the government but was eventually ruled out. In 2012, the UK coalition government sought feedback on the efficacy of TUPE in relation to professional services and found that there were "mixed views" about whether professional services should continue to be covered by the service provision change regime. In certain sectors, particularly advertising, there was strong support for  the idea of introducing an exemption. However, lawyers have highlighted problems with the operation of the New Zealand equivalent of TUPE and warned the government to be cautious in trying to exclude certain groups of employees. There are potential problems for employees as well. An employee might not want to transfer to the new employer. But, in those circumstances their only option is to "object" which in essence is a resignation but does not impose a duty not the employer to pay notice pay. As their role continues (with the new employer) they are not redundant and therefore have no  entitlement to redundancy pay and cannot (except in limited circumstances) claim unfair dismissal. Anomalies. When the new company takes over the work of its predecessor, it must take on the staff (from the old company) on their existing terms and conditions. This can create the situation where "transferring" employee may be on enhanced terms compared with an employee already employed by the new company. Harmonisation of the terms and conditions between the two groups of employees is generally not possible as the "reason" for it would be the TUPE transfer which (except in limited circumstances) is specifically prohibited. This  could result in a situation where a transferring employee (whose old contract gave them an enhanced holiday entitlement) may be working alongside an existing employee of the new company (working under a contract of employment whose terms were set by the "new" company) who has less generous holiday rights. Reform. In April 2011, the UK government proposed a number of reforms to TUPE. These were enacted in the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014, SI 2014/16, also known as CRATUPEAR, which came into force on 31 January 2014. Transfer of Undertakings (Protection of Employment