If you are a multinational with a branch or office in the UK, you should be aware of the laws that can affect any attempt to transfer your UK entity.  Basically, your employees have rights in the UK surrounding the terms of their employment in the event of a business transfer or branch closure, where you still intend to continue business activity in the UK.

1.    What is TUPE?

The Transfer of Undertakings (Protection of Employment) Regulations (TUPE) is a UK law that protects employee rights in the event that a business has a transfer of ownership to a new company.  TUPE applies to transfers of all or part of any going concern, to ensure that employment terms are transferred at the same time for affected employees.

The purpose of TUPE is to make sure that an employee’s current status, compensation and applicable benefits will not change when there is transfer of the business. The employee is transferred whole to the new business entity, and the new employer effectively steps into the shoes of the old employer as though they originated the employment contract.  One important exception to TUPE is when an existing company simply has a new owner, and there is no ‘TUPE transfer’...read more

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