Skip to main content
Facilitate Magazine: Informing Workplace and Facilities Management Professionals - return to the homepage Facilitate magazine logo
  • Search
  • Visit Facilitate Magazine on Facebook
  • Visit Facilitate Magazine on LinkedIn
  • Visit @Facilitate_Mag on Twitter
Visit the website of the Institute of Workplace and Facilities Management Logo of the Institute of Workplace and Facilities Management

Main navigation

  • Home
  • News
    • Comment
    • People
    • Reports
    • Research
  • Features
    • Analysis
    • Features
    • Round Tables
    • Webinars
  • Outsourcing
    • Contract Finder
    • Contracts
    • FM Business Models
    • Interviews
    • Mergers & Acquisitions
    • Opinion
    • Procurement
    • Trends
  • Know-How
    • Explainers
    • Legal Updates
    • White Papers
  • Jobs
  • Topics
    • Workplace Services
      • Hospitality
      • Catering
      • Cleaning
      • Front of House
      • Grounds Maintenance
      • Helpdesk
      • Mailroom
      • Manned Guarding / Security
      • Pest Control
      • Washroom Services
      • Disaster Recovery
      • Specialist Services
    • Professional Performance
      • Behavioural Change
      • Continual Professional Development
      • Education
      • Management
      • Recruitment
      • Training
    • Workplace Performance
      • Benchmarking
      • Health & Wellbeing
      • Operational Readiness
      • Procurement
      • Security
      • Workplace User Experience
      • Workplace Culture
    • Compliance
      • Health & Safety
      • Risk & Business Continuity
      • Standards
      • Statutory Compliance
    • Building Services
      • Architecture & Construction
      • Asset Management
      • Building Controls
      • Building Fabric
      • Drinking Water
      • Fire Protection
      • HVAC
      • Landscaping
      • Mechanical & Electrical
      • Building Security
      • Water, Drainage & Plumbing
    • Technology
      • Building Information Modelling
      • CAFM
      • Data & Networks
      • Document Management
      • Information Management
      • Internet of Things (IoT)
      • Software & Systems
    • Energy management
      • Energy Management Systems
      • Electricity
      • Gas
      • Solar
      • Wind
    • Sustainability
      • Environmental Quality
      • Social Value
      • Waste Management
      • Recycling
    • Workspace Design
      • Agile Working
      • Fit-Out & Refurbishment
      • Inclusive Access
      • Lighting
      • Office Interiors
      • Signage
      • Space Planning
      • Storage
      • Vehicle Management / Parking
      • Washroom
    • Sectors
      • Corporate Office
      • Education
      • Healthcare
      • Manufacturing
      • International
      • Retail
      • Sports & Leisure
      • Regions
  • Buyers' Guide
Quick links:
  • Home
  • Topics
Know How
Legal Updates
Compliance
Sustainability

LEGAL UPDATE: TUPE - A Brief Overview, Risk and Mitigation

Open-access content Wednesday 22nd February 2012 — updated 3.30pm, Tuesday 26th May 2020
How can facilities management suppliers mitigate the risk of falling foul of the TUPE regulations?


23 February 2012

The broad effect of the Transfer of Undertakings (Protection of Employment) regulations (TUPE) is to preserve the continuity of employment and the terms and conditions of those employees who are transferred to a new employer. It also contains a number of obligations upon the transferring employer (the transferor) and the receiving employer (the transferee) to inform and consult with affected employees.

How it applies
Briefly, for there to be a transfer under TUPE there must be:
  • a business or "undertaking" capable of transfer that does in fact transfer from one employer to another, retaining its identity; and/or
  • a change in contractor where services carried out by one service provider cease and are carried out instead by another (in other words, a "service provision change").
In practice, on a change of service provider all contracts of employment and associated liabilities will transfer by operation of TUPE from the outgoing employer or service provider to the incoming employer or service provider. Effectively, the new employer steps into the shoes of the old employer as though the employee's contract of employment was always with them. Where TUPE applies, a new employer usually cannot change the transferred employees' terms and conditions even to match those of its existing employees.

Thus, for example, when outsourcing a service for the first time, FM must ensure that their businesses fulfil their obligations and responsibilities to any transferring employees and fully disclose all necessary information to any new employer in accordance with TUPE.

Whether employees are within scope will always involve an assessment of the individual circumstances, but it is important to note that even though employees might not be operational or might be employed by a different entity, TUPE may nevertheless apply to them. For an FM, the question of exactly when TUPE does and does not apply can be challenging. This is why it is imperative to engage specialist legal and HR teams prior to any change of service provision or transfer of employees.

Key point: Failure to spot a TUPE risk is at the very nub of most TUPE disputes. It is safer to assume TUPE will apply even if in doubt as to whether TUPE does in fact apply.

Minimising risk
Often in the rush to transfer services to a new service provider, time is limited. At contract transition, commercial and operational mobilisation due diligence exercises must work in synergy with the HR due diligence process to discharge legal duties, protecting contractual terms by way of obtaining the right employee information, identifying risks and liabilities early on.
More often than not, customers and suppliers will supplement the fundamental position under TUPE by agreeing warranties and indemnities that go to (among other things) the conduct of the parties and the apportioning of liability, both on entry and exit. It is not a case of leaving the due diligence process solely for HR to sort out on their own; FMs need to initiate early discussion between all parties involved so as to indentify the commercial/monetary impact of TUPE on their organisation.

Key point: Seek a warranty when you want the other party to confirm that certain information they are giving you is correct.
For example, you will want to ensure that the information about the pay and benefits of transferring employees is accurate. If it turns out that it was inaccurate you will have a claim for damages against them, although this will be subject to an obligation to mitigate the ?loss suffered.
Seek an indemnity where you want a guaranteed remedy of reimbursement in respect of a particular liability. For example, if an employee has a claim that arose prior to their transfer. In such instance and under the indemnity, the client will reimburse the service provider's costs of dealing with ?this claim and any compensation ?it has to pay.

With any change of service provision there is frequently the likelihood of it affecting staff and their roles. Change does not come without a cost but the cost can be minimised when dealing with staffing issues related to outsourcing by managing this professionally and with the input of professional advisors to assist you during the process.

The mistake many firms make is at the very beginning by not explaining to staff that they are looking at ways to minimise costs which "may" result in changes to the way a process or function is run. By leaving this to the end of the process, it can potentially take longer to deal with and end up costing your organisation more.

For example, when pitching for a new bid ask yourself:
  • are the services being provided for a single client
  • is there going to be a designated team focusing mainly on that client's work; and/or
  • are we taking the services back from an external provider, or moving them out to a new provider, or transferring between outside providers?
Additionally, when looking at tender documents, check the small print! Buried in a tiny paragraph at the end of the document, the client may have inserted a clause that it makes no warranties about the applicability of TUPE. Ignore this at your peril, for once you've signed on the dotted line, it is you who will take all the liabilities if there is a TUPE situation or any related legal challenge; such claims will probably wipe out your margins.

Conclusions
1. Effective communication, due diligence and legal advice is vital at any stage of the TUPE process.
2. TUPE often presents significant uncertainties on exit, so it is best to deal with it at the outset. Ensure you do your due diligence (both legal and HR) and that you have secured (or provided only those) indemnities that are absolutely necessary in order to protect your legal and contractual position in the event ?of any claim.

Tony Thiaray is a commercial lawyer at Cushman ?& Wakefield facilities management


Also filed in:
Topics
Know How
Content
Legal Updates
Compliance
Sustainability

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Today's top reads

 

Latest Jobs

Project Leader (Maternity Cover One Year Contract)

Cambridge
Circa £50,000 Pro Rata + Benefits & Opportunities
Reference
56378

Maintenance Supervisor

Surrey
Up to £43,000 + Excellent Package & Opportunities
Reference
56376

Regional Facilities Manager

South West England
Circa £40,000 + Benefits & Opportunities
Reference
56375
See all jobs »

 

 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to print

Sign up to receive our bi-monthly magazine

Subscribe
Facilitate magazine cover, June 2020
​
FOLLOW US
@Facilitate_Mag
Facilitate Magazine
Facilitate Magazine
CONTACT US
Contact us
Tel: 020 7880 6200
​

IWFM

About IWFM
Become a member
Qualifications
Events

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to Facilitate Magazine
Write for Facilitate Magazine

General

IWFM Jobs
Help

© 2022 • www.facilitatemagazine.com and Facilitate Magazine are published by Redactive Media Group. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ