1 Introduction
1.1 The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006) applies to the transfer of an undertaking, business or, part of one, situated in the UK and to service provision changes. Service provision changes include outsourcing, in-sourcing and changes of contractor. TUPE 2006 was subsequently amended by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 (TUPE 2014).
1.2 This note uses the following defined terms:
Transferor: the seller of the business or the entity which carried out the services prior to the service provision change.
Transferee: the buyer or the entity who is to carry out the services because of the service provision change.
1.3 TUPE 2006 introduced a new obligation on transferors to provide employee liability information to a transferee before the transfer.
2 When must the employee liability information be provided?
2.1 The notification of employee liability information must be provided by the transferor to the transferee at least 28 days before the relevant transfer or service provision change unless there are special circumstances which mean it is not reasonably practicable to do so, in which case it must be provided as soon as reasonably practicable.
2.2 The employee liability information should contain information as at a specified date which is not more than 14 days old as at the date it is made available to the transferee.
2.3 Any change to the employee liability information once it has been given to the transferee must be notified in writing.
3 How must the employee liability information be provided?
3.1 The employee liability information must be provided either in writing or in readily accessible form.
3.2 The information can be provided in more than one instalment and may be provided via a third party such as a legal adviser.
4 What employee liability information must be provided?
4.1 The employee liability information which must be provided is specified in TUPE 2006 as:
4.1.1 the identity of employees who will transfer;
4.1.2 the age of those employees;
4.1.3 information contained in the statement of employment particulars of those employees (this will include information about the terms and conditions dealing with job title, remuneration, hours, holidays, terms relating to incapacity for work due to sickness or injury (including any provision for sick pay), other types of paid leave, pensions and other benefits, when employment began, length and conditions of any probationary period, training, length of notice, place of work, relevant collective agreements and overseas working);
4.1.4 information about any collective agreements which will transfer with the employees;
4.1.5 information on any disciplinary procedure taken against an employee and any grievance procedure taken by an employee in the previous two years; and
4.1.6 information on any legal proceedings taken by an employee against the transferor in the previous two years and information in relation to any claim or action that the transferor has reasonable grounds to believe an employee may bring arising out of their employment against the transferor.
Sample contracts, staff handbooks and copies of collective agreements could be provided to satisfy this obligation.
5 Does information only have to be provided in respect of employees who transfer?
No, employee liability information must also be given in respect of employees who were previously employed in the undertaking but have been dismissed because of the transfer itself or for a reason connected with the transfer which is not an economic, technical or organisational reason entailing changes in the workforce. Such employees will be regarded as automatically unfairly dismissed and liability for such dismissal will transfer to the transferee.
6 What about data protection laws?
The Information Commissioner (ICO) has confirmed TUPE 2006 requires that the transferee is provided with specific details about their new workforce in advance of any transfer or change in service provision. The Data Protection Act 2018 permits these disclosures as they are required by law, but the parties must comply with data protection principles when handling personal information. For example, some transfers are outside the scope of TUPE 2006 (such as share takeovers) or in the early stages of the sale of a business there may be a number of potential bidders, only one of whom will become the eventual new employer but all of whom need the information to assess whether to pursue the purchase; or the prospective new employer may request more information than is required under the TUPE 2006 regulations.
7 Wherever possible, the employer should release information that is anonymous or, at the very least, should remove obvious identifiers such as name. Employers should only disclose this extra information with the consent of the individuals concerned or put in place appropriate safeguards to make sure that the information will only be used in connection with the proposed business transfer and will not be kept once it has been used for this purpose.
8 Failure to provide employee liability information
8.1 Where a transferor has failed to comply with their obligations to provide employee liability information under TUPE 2006 a transferee may bring a claim in the employment tribunal within three months of the relevant transfer.
8.2 If the complaint is well founded the tribunal may order the transferor to pay compensation to the transferee. In deciding the amount of compensation to be awarded the tribunal shall have regard to:
8.2.1 the loss sustained by the transferee as a result of the transferor’s non-compliance;
8.2.2 any contractual terms agreed between the parties under which the transferor may be liable to pay a sum to the transferee in respect of the failure to provide the relevant employee liability information.
8.3 It should be noted that a transferee is bound by the normal common law duty to mitigate its loss as a result of the transferor’s breach. Subject to this a tribunal must award at least £500 per employee in respect of whom the transferor failed to provide information. A tribunal has the discretion to award a lesser sum if it considers it just and equitable to do so. The archived Department for Business and Trade guidance suggested that “trivial or unwitting breaches” may lead a tribunal to waive the minimum award.
This guidance note is intended to provide a brief summary and general guidance only and should not be used as a substitute for specific advice about your particular circumstances: specialist advice should always be sought.