In essence, TUPE applies where there is a ‘relevant transfer’. The 2006 Regulations clarified complicated case law to determine that a relevant transfer means the ‘transfer of an economic entity which retains its identity’. In determining whether this has happened, the courts take into account factors such as:
the type of undertaking being transferred;
whether any tangible assets (buildings, moveable property etc) are transferred;
whether any intangible assets are transferred and the extent of their value;
whether the majority of the employees are taken on by the new employer;
whether any customers are transferred;
the degree of similarity between the activities carried on before and after the transfer;
the period for which the activities were suspended, if any.
The question of exactly when TUPE does and does not apply is a very complex one. If you think a transaction you are involved in might be covered by TUPE you should always take specialist legal advice. Virtually all service provision changes are covered so it is safe to assume that TUPE applies to most outsourcing without the need for protracted legal argument. However, because of the uncertainty surrounding when TUPE applies, it is common for this issue to be regulated by contract.
