M&A, Outsourcing & TUPE
Understanding and correctly applying TUPE is a critical part of the process of buying and selling businesses, outsourcing and internal group reorganisations.
Our specialist TUPE group has a wealth of experience advising on such matters including providing expert M&A employment support, drafting and negotiating suitable legal protections and assisting our clients to manage risk and find commercial solutions to contentious employment transfers.
As employees become more aware of their rights, the risks of not managing these situations appropriately are steadily increasing and can be magnified significantly where large numbers of employees are involved.
We have particular expertise in the following areas:
- advising both customers and vendors on the employment aspects of outsourcing tenders
- drafting and negotiating both market standard and bespoke warranties and indemnities including to cover multi-jurisdictional acquisitions and outsourcings
- undertaking buyer and vendor employment due diligence and advising on pre-sale reorganisations
- providing expert opinion on the applicability of TUPE including identifying who is correctly in scope to transfer
- scripting and training both employers and employee representatives in meeting their consultation obligations
- legislative reform in relation to TUPE and expert analysis of TUPE case law
- TUPE-equivalent legislation in overseas jurisdictions
- effecting post-transfer redundancies and harmonisation of employment terms
- advising on the special rules applicable to insolvent businesses
- dealing with TUPE’s effect on pensions and other benefits
- managing TUPE litigation in the Employment Tribunal
We work closely with clients and provide transactional support both to our own M&A colleagues and to other law firms.
When does service provision change amount to transfer of an economic entity?31 January 2018
The European Court of Justice (“ECJ”) was recently required to consider whether the award of a service contract to a replacement contractor in Portugal amounted to the transfer of an economic entity under the EU Acquired Rights Directive (“ARD”). Portugal has no equivalent legislation to the UK’s service provision change (“SPC”) rules
Further clarity on relevance of TUPE following a share sale31 January 2018
How relevant is TUPE in the context of a share sale? A recent decision of the Employment Appeal Tribunal (“EAT”) provides a reminder that TUPE can easily come into play when a buyer is considering what to do with its newly acquired subsidiary. In this case, the buyer’s actions led to an unexpected TUPE transfer and a £3.5 million bill.
TUPE and offshoring30 January 2018
In a recent case, the Employment Appeal Tribunal (“EAT”) was asked to consider the application of TUPE in the context of an offshoring of services and whether a transferring employee was entitled to protection of his salary terms if he relocated to the new place of operations in the transferee’s home jurisdiction.
Advocate General suggests no transfer on change of music school contractor26 January 2018
An Advocate General (“AG”) of the European Court of Justice (“ECJ”) has considered whether a transfer of an undertaking occurred where a contract to operate a Spanish music school was terminated and another contractor resumed the service five months later. Under the EU Acquired Rights Directive (“ARD”), a transfer of an undertaking occurs where there is a transfer of an economic entity which retains its identity. An economic entity consists of an organised grouping of resources (i.e. persons and assets), organised with a view to carrying on economic activity.
Equal pay, TUPE and insolvency24 January 2018
The issue for the Employment Appeal Tribunal (“EAT”) in a recent case was what happens to historic equal pay liabilities when claimant employees transfer under TUPE on to a new employer in the context of the transferor employer’s insolvency.
Automatic transfer of employees applies on ‘pre-pack’ sale25 September 2017
The European Court of Justice (“ECJ”) has confirmed that, in the event of a “pre-pack” sale aimed at rescuing all or part of an insolvent undertaking as a going concern, EU transfer of undertakings law requires that the employees automatically transfer. This is consistent with the position in the UK under TUPE.
Employee liability information is not limited to contractual matters25 September 2017
The Employment Appeal Tribunal (“EAT”) has ruled that the employee liability information (“ELI”) that a transferor is required to provide under regulation 11 of TUPE is not limited to contractual entitlements. In addition, the EAT decided that there is no obligation on the transferor to set out whether any entitlement is contractual or not.
Service provision changes – determining principal purpose of organised grouping25 September 2017
The EAT has given guidance on the correct approach to determining the “principal purpose” of an organised grouping of employees within the meaning of the service provision change (“SPC”) rules under TUPE.