Known as TUPE, The Transfer of Undertakings (Protection of Employment) Regulations 2006 is a law which aims to protect employees should a business in which they work change hands.
However, it adds substantial complications to a business’s sale and generally works against commercial interests in such transactions. It is a law that seems particularly out of place in the current economic climate and is in need of an overhaul, and the Government has recently published a report making controversial proposals changes to it.
There is a case to argue that TUPE is unnecessary and should be abolished in its entirety. Other jurisdictions manage to buy and sell businesses and retain important employees without TUPE (or an equivalent). For example, in the US, business transfers take place with little employment regulation. What regulation there is consists mostly of limited obligations to give employees, unions and local and state authorities notice of the transaction and its effects.
Of course, we know this is not possible in light of the UK’s EU obligations, including continuing to implement the terms of the Acquired Rights Directive. However, the Government has been consulting on planned changes to TUPE in order to lighten the burden on employers in complying with its requirements….