If you’ve established that a business transaction you are considering embarking upon will or may involve TUPE obligations, you need to identify which employees will be affected. Both the transferor and the transferee have specific consultation obligations to those employees impacted by the transfer, so it’s not just a case of working out who will transfer.
Which employees transfer?
Those employees who are “assigned” to the business, to the part of the business or to the service that is transferring to a new entity, will transfer. Sometimes it’s obvious who these people are, but not always. You may need to look at how much time different employees spend on different things, or in different areas of the business. (This needs to be what they are actually doing, not what a job description or contract says).
It’s important to know you can’t transfer part of a job. If someone is working solely or mostly for the part of the business that is transferring, they will transfer with it completely. But if their role is genuinely split and they only spend a proportion of their time on the relevant area of the business, they won’t transfer at all. Their employment won’t be split, they will just stay with the original employer.
If someone is normally working in the affected area of the business but is on temporary secondment elsewhere in the company, or absent on maternity leave, long-term sickness absence or similar, you mustn’t forget about them. They will still transfer as long as they would ordinarily be working in the affected area of the business.
If you are buying or selling a branch of a business, it may seem clear that all the employees who work at that branch transfer ‘cleanly’ over and no one is really affected. However you should also check whether there is anyone else working in the transferor’s business who might also need to transfer. How centralised services are structured in the transferor’s business might be very relevant. If, for example, there is someone in a central marketing department who spends most of their time on marketing activities for the branch in question, they are likely to transfer as well.
Other affected employees
The consultation and information requirements of TUPE legislation don’t just apply to those employees who will actually be transferring over. “Affected employees” has a wider definition. If employees left at the transferor will have their roles impacted by colleagues transferring elsewhere, they are ‘affected’. If there was a big central team of sales support staff, and some of them who only provided support to one area of the business are transferred out, it is possible that the structure of the team and how it is organised/managed may change significantly.
Similarly, if a company buys out a branch of a similar business locally, or takes on a new contract on an outsourced basis, those individuals already employed at the transferee may be significantly affected. If the transferring employees include an administrator who was designated solely to that business, but in the transferee’s organisational structure admin support is all provided centrally, there may be an impact on admin staff at the transferee. In a more extreme example, the transferee may decide it doesn’t need two branches in close proximity so may decide to close one of them completely – again there will clearly be an impact on existing employees.
If you are contemplating a business transaction involving TUPE and are unsure who you need to consult with as ‘affected employees’ then do get in touch for some specific advice regarding your situation.