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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.

Related items

Pre-transfer dismissal was by reason of transfer and automatically unfair

06 September 2018

The Employment Appeal Tribunal (“EAT”) has upheld a decision that the dismissal of an employee immediately before a TUPE transfer was automatically unfair because the principal reason was the transfer. The EAT rejected the transferee employer’s contention that the reason for the dismissal was personal to the employee’s circumstances and so unrelated to the transfer.

TUPE and the transfer of public administrative functions

06 September 2018

In a case about whether TUPE applied to the transfer of a public health team commissioning services, the Employment Appeal Tribunal (“EAT”) has considered points of appeal in relation to two seldom litigated provisions of TUPE.

Fragmentation of activity may preclude service provision change

06 September 2018

The Employment Appeal Tribunal (“EAT”) has confirmed that when considering whether or not there has been a TUPE service provision change (“SPC”), it is critical to identify the relevant activity. The analysis must be done in the right order and any fragmentation should be considered when considering if activities carried on by the subsequent service provider are fundamentally the same as those carried on by the outgoing service provider.

Five-month cessation of activities does not prevent transfer of undertaking under EU law

04 September 2018

In a Spanish case, the European Court of Justice (“ECJ”) has ruled that a five-month break in activities between outsourcing contracts did not prevent the transfer of an undertaking under the 2001 EU Acquired Rights Directive (“ARD”).

Richard Moore writes for Law360: UK Employment Law Risks In Cross-Border M&A

11 June 2018

In an article for Law360, Richard Moore discusses the employment law considerations U.S. companies need to think about when acquiring U.K. based companies or assets, due to a number of differing fundamental employment principles.

Alison Clements writes for People Management: Legal TUPE and cross-border transfers explained

20 April 2018

In light of recent Employment Appeal Tribunal (EAT) ruling, Alison Clements discusses how TUPE applies in an offshoring situation, in an article for People Management.

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 sale

31 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.

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