This "Brief Guide" gives information and outlines employment law surrounding Transfer of Undertakings (TUPE), Mergers and Acquisitions.

1. Brief Guide to Transfer of
Undertaking (TUPE)
(This is a brief guide only and should not be considered as a comprehensive guide to Transfer of
Undertakings [TUPE])
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2. Prepared by
CollierBroderick Management Consultants
Tel: +353 1 8666426
Fax: +353 1 8666457
E-mail: enquiries@collierbroderick.ie
Web: www.collierbroderick.ie
Disclaimer
Whilst every care has been taken by CollierBroderick Management Consultants to ensure that the information
contained in this guide is accurate and up-to-date, as the guide is for information purposes, the contents of these
pages should not be relied upon as a substitute for your own independent HR or legal advice. We recommend
that you always consult a suitably qualified HR or legal professional on any specific matter before relying on any
information in this guide.
No responsibility or liability is accepted by or on behalf of CollierBroderick Management Consultants or anyone
associated with its production for any errors or omissions in the guide, nor for any use the information may be put
to.
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3. A Guide to Transfer of Undertaking (TUPE)
Relevant Legislation
• European Council Directive 2001/23/EC, introduced into Ireland as the European
Communities (Protection of Employees on Transfer of Undertakings) Regulations SI
131/2003
• Employees (Provision of Information and Consultation) Act, 2006
Principal Aims of the Protection of Employees on Transfer of Undertaking Regulations
The Protection of Employees on Transfer of Undertakings Regulations are designed to
safeguard employees’ rights in the event of a transfer and to establish the responsibilities of
both the previous and new owners of the business.
The conditions of employment and contracts of employment of individual employees involved
in a transfer are protected and, ordinarily, the dismissal of an employee by reason of a
transfer of undertakings is prohibited.
Employees of a business being transferred should move to the new employer with their
accrued years of service, existing terms and conditions of employment and collective
agreements to which they may already be subject (excluding occupational pensions) The
new employer must continue to observe the terms and conditions of any collective
agreement in place until it expires or is replaced.
The new employer is under no obligation to provide a new or similar occupational pension
benefit to employees who have transferred to the new business, however the new employer
must ensure that any scheme in place is properly maintained in order to protect any accrued
entitlement
When the Protection of Employees on Transfer of Undertaking Regulations Apply
A transfer of undertakings occurs when a business, or part of a business, is taken over by
another employer as a result of a merger or transfer.
For a transfer of undertaking to take place:
• There must be a change in the person (either an individual or a company) responsible
for running the undertaking/business
• The previous economic activity of the undertaking/business must be carried on by the
new employer
• The undertaking/business must be transferred as a "going concern".
In general, the Protection of Employees on Transfer of Undertaking Regulations apply to any
person
• working under a contract of employment, including apprenticeship
• employed through an employment agency
• holding office under or in the service of the State, an officer or servant of a harbour
authority, health board or vocational education committee, and a member of the
Garda Siochana or of the Defence Forces.
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4. The Protection of Employees on Transfer of Undertaking Regulations apply to public and
private undertakings engaged in economic activities whether or not they are operated for
gain. They do not apply to sea-going vessels
In the case of agency workers, the party who is liable to pay the wages (employment agency
or client company) is the employer for the purposes of these Protection of Employees on
Transfer of Undertaking Regulations.
There are no hard and fast rules governing what is, and is not, a transfer of undertakings. It
is a technical issue which is affected by new case law on an ongoing basis. It is important to
establish whether a transfer of undertakings has taken place and therefore prudent to take
legal advice in the event of a possible transfer.
When the Protection of Employees on Transfer of Undertaking Regulations DO NOT
Apply
A transfer under the (Protection of Employees on Transfer of Undertakings) Regulations
does not occur in the case of a compulsory liquidation, or insolvency, of the
undertaking/business.
However, if the sole or main reason for the institution of bankruptcy or insolvency
proceedings is the evasion of an employer’s legal obligations under the Transfer
Regulations, then the (Protection of Employees on Transfer of Undertakings) Regulations
apply to a transfer affected by that employer.
Consultation
The Employees (Provision of Information and Consultation) Act 2006 provides a general right
to information and consultation for employees from their employer on matters which directly
affect them.
In addition to this, under the Protection of Employees on Transfer of Undertaking
Regulations, employer must consult with the employees’ union or, in the absence of a union,
with the chosen representative(s) of the employees. Both the original employer and the new
employer must inform the representatives of the employees affected by the transfer, of:
• The date, or proposed date, of the transfer;
• The reasons for the transfer;
• The legal implications of the transfer for the employees and a summary of any
relevant economic and social implications of the transfer for them, and any measures
envisaged in relation to the employees.
The original employer must give this information to the employees’ representatives, where
reasonably practicable, not later than 30 days before the transfer and in any event, in good
time before the transfer occurs.
The new employer must give the information to the employees’ representatives, where
reasonably practicable, not later than 30 days before the transfer occurs and in any event, in
good time before the employees are directly affected by the transfer as regards their
conditions of work and employment.
Where there are no employee representatives, the employers must arrange for the
employees to choose (including by means of an election) representatives for this purpose.
However, if there are still no employees’ representatives in the undertaking through no fault
of the employees, the employees concerned must be notified in writing, with the details
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5. described above, where reasonably practicable, not later than 30 days before the transfer
and, in any event, in good time before the transfer.
The consultation obligations apply whether the decision resulting in the transfer is taken by
the employer or another undertaking controlling the employer. The fact that the information
concerned was not provided to the employer by the controlling undertaking will not release
the employer from those obligations.
Dismissal as a Result of a Transfer of Undertaking
The transfer of an undertaking, business or part of a business does not constitute grounds
for dismissal.
There is nothing in the Protection of Employees on Transfer of Undertaking Regulations that
prohibits dismissals if the employer can show justification for such dismissals for economic,
technical or organisational reasons involving changes in the work-force. However, a
company must have clear, factual grounds for dismissals in these circumstances.
Termination of employment arising out of changes to working conditions to the detriment of
the employee is regarded as the responsibility of the employer imposing the changes and
would be considered to be a possible constructive dismissal.
Although the UK transfer regulations provide for a right of refusal to transfer to another
employer, in Ireland the (Protection of Employees on Transfer of Undertakings) Regulations
are silent on the consequences for an employee who refuses to transfer.
An employee cannot be forced to work for the new employer. However, equally, an
employee cannot insist on continuing to work with the old employer if the whole business, or
the part of the business in which they have been employed, transfers.
Where an employee refuses to transfer, no liability ensues for the new employer - save
where an employee sues for constructive dismissal. In a recent EAT judgement, an
employee who refused to transfer to the new employer was entitled to statutory redundancy
pay from their old employer (UD470/2007).
Any employee who transfers to the new business/undertaking and is subsequently dismissed
must have all entitlements calculated on continuous service with both the transferor and
transferee
Redress
If a dismissal results solely from a transfer of undertaking, and the employee considers it to
be unfair, they may refer a complaint under the Unfair Dismissals Act 1977 to 2001 (if they
have 12 months continuous service) or under the Transfer of Undertakings Regulations,
2003 (whether or not they have 12 months continuous service). They cannot claim under
both. A maximum of 2 years remuneration could be awarded.
If an employer fails to consult with employees or their representatives a complaint may be
brought to the Rights Commissioner under the Transfer of Undertaking Regulations and
appealed to the Employment Appeals Tribunal. A maximum of 4 weeks remuneration could
be awarded.
Complaints about pensions that are covered by the Pensions Acts should be referred to the
Pensions Board. Complaints about other pensions should be referred to the Rights
Commissioner.
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6. For
Consultation Services relating to HR, Employment Law, Transfer of
Undertaking or Redundancy
Contact
Helena Broderick
Managing Consultant
Tel: +353 1 8666426
Mob: + 353 87 9074843
E-mail: hbroderick@collierbroderick.ie
Services are available nationwide through our team of experienced HR
practitioners and employment law consultants
Web: www.collierbroderick.ie
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