Under the TUPE regulations, a business is not judged by its name but by the use made of its assets. This means that during TUPE transfers, a business is judging by how it uses its assets. This includes:
- Company premises
- Equipment used by the business
- Ongoing work projects
- Goodwill (eg the value of a brand name or a customer base);
- Intellectual property belonging to the company
- Their employees
To fulfill a business TUPE transfer, the core assets of the business must be transferred to the new owner. The new owner must then be using those assets in the same manner as the previous owner. TUPE may not apply if the transfer just involves shares, limited assets or equipment.
A service TUPE transfer is only applicable when at least one of the following criteria is met:
- A contractor takes over activities from a client (i.e. those activities are ‘outsourced’).
- A new contractor takes over activities from another contractor (known as ‘re-tendering’).
- A client takes over activities from a contractor (i.e. those activities are ‘in-sourced’).
The rules associated with service TUPE transfers don’t apply if it only affects the supply of goods. A service transfer MUST also include a transfer of services (hence the name). TUPE transfers also won’t apply if the service involves single or short term activities or events such as exhibitions.
What Do I Need To Do?
A TUPE transfer affects both parties. That means whatever side of the transfer you’re on, you have a role to play. You need to protect your business and your staff as well as those on the other side of the transfer.
The TUPE process can be confusing for seasoned legal professionals. It’s even worse your first time dealing with it. However, it doesn’t need to be. Our employment law experts are here to guide you every step of the way. Call us on 08450 50 40 60 or fill in the contact form to get your free consultation!