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What is TUPE?  Can an Employee refuse a Transfer of Undertaking? These are some of the Frequently Asked Questions (FAQs) we get asked regularly at Adare Human Resource Management. Our team of experts have devised a full list of FAQs below:

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What is transfer of undertakings?

A Transfer of Undertakings occurs where a business or part of a business transfers from one owner to another.

A transfer means the transfer of an economic entity which retains it’s identify.

The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003) apply in a Transfer of Undertakings. These Regulations are designed to safeguard Employees’ rights in the event of such a transfer, and establish the responsibilities of both the previous and new owners of a business.

What are the aims of the legislation?

The principle aims of the legislation are:

  • Protection of conditions of employment and contracts of employment of individual Employees involved in a transfer.
  • Under limited circumstances, making provisions for the protection of employment in a transfer.
  • Ordinarily prohibiting the dismissal of an Employee by reason of a transfer of undertakings.
  • Requiring the transferor and transferee to inform the representatives of the Employees affected by the transfer of the legal, social and economic implications of the transfer and consult with them regarding any proposed measures.
  • Ensuring that that the primary responsibility for an Employee’s employment rights is passed from transferor to transferee.
  • Ensuring that any collective agreement that was in place before the transfer is honored.
  • Protecting continuity of representative rights.

There are no rules set in stone to classify what is, and is not, a transfer of undertakings. To determine whether the legislation applies to a situation, the facts around the transfer must be considered.

Case law is important when it comes to this area and in cases brought under this piece of legislation, the main case that the Workplace Relations Commission will refer to is the ‘Suzen’ case.

This case placed huge importance on identifying the key assets of the business. 

This case found that if ‘significant operational assets’ are included in the transfer, it indicates that the legislation will apply. These assets can be such things as equipment for people for example.

Other concerns relate to consideration as to if the business is being transferred as a ‘going concern’ or the retention of the business’ identity.

It is vital for both Company’s to find out if a transfer has actually taken place.

What does the legislation cover?

The regulations cover all Employees and all Employers in undertakings, businesses or parts of a business which are transferred to another Employer as a result of a legal transfer or merger.

There is a requirement that a legal transfer of ownership takes place. A partial share transfer without a change of legal ownership does not constitute a transfer of undertakings. A transfer where the undertaking is the subject of bankruptcy or insolvency proceedings is also precluded, except where the sole or main reason for the proceedings is the evasion of an Employer’s legal obligation under the regulations. The regulations do not provide for a transfer of undertakings from Ireland to another country. However, the regulations may apply to a transfer within a group of companies operating in Ireland eg, the business of one subsidiary being taken over by another subsidiary.

How is contracting out services or functions covered under TUPE regulations?

While contracting out is not specifically mentioned in the Directive, it is important to give consideration to this. In Ireland, there are four main activities surrounding the issue of contracting out:

  1. Contracting out activities
  2. Changing contractors
  3. Contracting in an activity
  4. In-sourcing a previously contracted out activity

The legislation applies if the situation meets the same tests set down for transfers, as outlined earlier. In addition, the part of the business being contracted out must be separable and an economic entity in itself. Sometimes it becomes difficult to determine whether the legislation applies here, especially in labour intensive industries.

How are the rights of the Employee affected during the TUPE process?

In the event of a transfer, all obligations, including continuity of service, arising out of the employment relationship are automatically moved to the new Employer.

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