Transfer of business (TUPE)
Your rights are protected if your employer’s business is taken over by another employer as a result of a legal merger or transfer.
The law that applies is the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003. The Regulations apply to an undertaking which can be a business, a charity or non-profit-making organisation.
Your rights are protected if all of the business is sold off or if just the part you are working in. For example, an employer could transfer its customer service section to another company and the transferred workers are protected by the Regulations.
What is a transfer of undertakings?
A transfer of undertakings (also known as TUPE) is where employees are transferred to another employer as part of a legal merger or sale of the business.
For a transfer of undertaking to take place:
- There must be a change in the person (either an individual or a company) responsible for running the business
- The new employer must carry out the previous economic activity of the business employer
- The business must be transferred as a "going concern".
A compulsory liquidation of the business is not a transfer of undertakings under the Regulations. A changeover of contractors is not a transfer of an undertaking. So, if an unrelated entity simply takes over the contract from your employer, there will generally be no entitlement to transfer to the new contractor under TUPE.
Who is covered by TUPE?
TUPE applies whether you are:
- An employee
- An apprentice
- An agency worker
- A civil servant or state employee
Your employement rights under TUPE
Contract of employment
Under the Regulations the new employer is legally obliged to take on the existing employees of the business. The new employer must take on the employees on the same terms and conditions (except for pensions – see below).
This means that the terms and conditions in your contract of employment and your employer’s obligations are automatically transferred to your new employer.
If there is a collective agreement (for example, on shift arrangements and overtime) your new employer must continue to keep to its terms and conditions until it expires or is replaced.
For the purposes of redundancy legislation a transfer of business does not break the employees’ continuity of service. Instead it is transferred to their new employment.
Employee pension rights in relation to old age, invalidity or survivors benefits generally do not transfer to the new employment.
So if you have an existing occupational pension, this may not continue as before. This means the new employer is not obliged to continue making the same pension contributions on your behalf. However, any entitlements that you have built-up before the transfer must be protected by the new employer.
If your previous employer had provided entitlements similar to pension schemes though, such as an entitlement to a lump sum on dismissal before retirement, the new employer must ensure that those rights are protected and continue.
This is a complex area of TUPE law and you may need to contact the trustees of your pension scheme or get legal advice.
The transfer of a business (or part of), does not in itself constitute grounds for dismissal.
However, your employer can dismiss you if there are justifiable economic, technical or organisational reasons.
Whether there are justifiable grounds for dismissal will depend on the facts of each case. If you do not agree the grounds exist, you can bring a claim for unfair dismissal - see 'How to complain about a TUPE' below.
If your contract of employment is terminated because a transfer involves a substantial change in working conditions to your detriment, your employer is considered responsible for the termination of the employment.
So, for example, if your new employer cuts your wages because they feel that you are being paid too much and you resign as a result, your new employer will be considered responsible for the dismissal by failing to honour your contract of employment.
Requirement to consult employees
You have a general right to information and consultation on issues that directly affect you. This right is set out in the Employees (Provision of Information and Consultation) Act 2006.
The legislation requires employers to inform and consult employees on any decisions likely to lead to substantial changes in work organisation or contractual relations. There is a particular mention of mergers and acquisitions and to collective redundancies.
This means that employers must consult with employees before major decisions are made, including transfer of business. This applies to employers with at least 50 employees.
The employer must also consult with the employees’ union or, in the absence of a union, with the chosen representative(s) of the employees.
Information you must be given
Under the Regulations, you or your union must be given the following details of the transfer:
- The reasons for the transfer
- The date or proposed date of the transfer
- An assessment of the legal, economic and social implications for the employees
If you are in a union: The union must get the above information no later than 30 days before the transfer.
If you are not in a union: You must get the above information in writing from your employer no later than 30 days before the transfer.
This requirement also applies if you work for an employer with less than 50 employees.
How to complain about a TUPE
Complain to the Workplace Relations Commission (WRC)
You can bring a complaint to the WRC within 6 months if:
- You have been dismissed because of the transfer, or
- Your employer has failed to consult you or your union
You must use the online complaint form available on workplacerelations.ie.
The time limit may be extended for up to a further 6 months, but only where there is reasonable cause which prevented you making the complaint within the normal time limit.
Complain about your pension
Complaints concerning pensions covered by the Pensions Acts should be referred to the Pensions Authority - see 'Where to complain' below. Complaints concerning other pensions should be referred as above.
You can get more information on the transfer of undertakings from Workplace Relations Commission's Information and Customer Service - see 'Where to complain' below.