The TUPE regulations can apply when a company is sold or its activities are:
- Brought in-house
or a contract for services is moved from one service provider to another.
Under TUPE, a business is not judged by its name but by the use made of its assets, such as the:
- Work in progress;
- Goodwill (eg the value of a brand name or a customer base);
- Intellectual property; and
To test whether a business has transferred, ask yourself whether the core assets of the business have transferred to the incoming employer and are being used in essentially the same kind of business activity as previously. TUPE will not apply if there are just shares, limited assets and/or equipment transferring to a different owner.
Service provision changes
The TUPE regulations apply in the following situations:
- A contractor takes over activities from a client (i.e. those activities are 'outsourced').
- A new contractor takes over activities from another contractor (known as 're-tendering').
- A client takes over activities from a contractor (i.e. those activities are 'in-sourced').
The service provision change rules under TUPE will not apply if there is just a supply of goods. The transfer must include a supply of services as well. TUPE will also not apply if the service is for single-event activities/activities of short-term duration (eg an exhibition/conference).