Before a TUPE transfer, by law both the old and new employers must inform and consult with a recognised trade union or employee representatives.
'Inform' is when an employer tells affected employees or their representatives the facts about the transfer.
'Consult' is when an employer:
- talks and listens to affected employees or their representatives about expected 'measures' – measures are changes that could affect employees
- genuinely considers their views
Informing and consulting is a legal obligation. It can also:
- reduce stress and uncertainty for employees
- help employers to identify potential problems early on
- make the transfer smoother
If an employer does not inform and consult
If the old or new employer fails to inform or consult, they might be jointly or individually liable.
Depending on the situation, they could be taken to an employment tribunal by:
- the affected employees
- a recognised trade union or elected employee representatives
Failing to consult with trade union or employee representatives
An employer will have failed to inform and consult if:
- there is a recognised trade union and they did not consult its representatives
- there is no recognised trade union and the employer failed to arrange an election of employee representatives to consult with
- they did not genuinely and meaningfully consult with employee representatives
Failing to consult with employees directly
In some situations an employer will have failed to inform and consult if they do not consult with employees directly. This will depend on the size of the organisation or the number of employees transferring.
There are different rules depending on when the transfer takes place. This is because the law changed on 1 July 2024.
For transfers on or before 30 June 2024
An employer has failed to inform and consult if there are no recognised trade union or employee representatives and both of the following apply:
- they have fewer than 10 employees
- they did not consult with employees directly
For transfers on or after 1 July 2024
An employer has failed to inform and consult if there are no recognised trade union or employee representatives and either:
- they have fewer than 50 employees in their organisation and they did not consult with employees directly
- fewer than 10 employees are transferring and the employer did not consult with employees directly
If an employer does not tell employees about a TUPE transfer
Employees might be able to make a claim to an employment tribunal if their employer:
- does not tell them or their representatives about a TUPE transfer
- does not give them or their representatives the name of the new employer
If an employee decides to make a claim, they should do this as soon as possible. This is because there are strict time limits for making a claim to an employment tribunal.
Who pays compensation
If an employment tribunal claim is successful, either employer could have to pay compensation.
They could have to pay up to 13 weeks' uncapped gross pay for each affected employee.
Employers should get an indemnity from each other before agreeing the transfer. An indemnity is an agreement from the other employer that they will pay for costs if they fail to consult.