12. BUSINESS TRANSFERS AND CONTRACTING OUT — TUPE

The purpose of TUPE

The aim of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) regulations is to protect the employment terms and conditions of employees when the business that employs them is transferred from one organisation to another. There are some exceptions. In particular, pensions do not transfer. TUPE was enacted to meet the requirements of a piece of European law — the Acquired Rights Directive (77/187).

Where regulations are based on an EU Directive, tribunals are expected to adopt a “purposive” (as opposed to a literal or restrictive) approach to interpreting the law. In other words, the regulations should be interpreted liberally with the aim of achieving the Directive’s core objective which is to “safeguard employees’ rights in the event of transfers of undertakings or businesses”.

However, not every part of TUPE is based on the Acquired Rights Directive, and in new guidance issued in April 2013: How to implement European Directives effectively, the government has made explicit its plan to end the practice it describes as “gold plating”, where UK laws provide more protection to workers than the minimum required by the Directive.

The most important part of TUPE that exceeds the precise scope of the Directive is the part that governs outsourcing and changes in the service provider, known as the service provision change regulations. In its Impact Assessment on their proposed repeal of these regulations, the government is explicit that it regards them as a barrier to its plans for a massive increase in public sector outsourcing, because the regulations preserve the terms and conditions of workers whose jobs are to be transferred into the private sector.