THE GRAPEVINE! news, comment & a bit of gossip, Welfare to Work

-TUPE: employees left out in the cold. What next?

As the Work Programme enters its fourth week of operation, and public sector cuts and strikes loom menacingly over the horizon, the issue of TUPE is causing some consternation between Primes and their supply chain.

The Treasury’s Comprehensive Spending review estimates that 490, 000 jobs in the public sector will be axed over the next 5 years, yet some of these roles will be transferred from government agencies into the private sector, via TUPE.  TUPE applies to most services but the issue is now commonly regulated by contracts due to the ambiguity as to when TUPE categorically applies.


“All the transferor’s rights, powers, duties and liabilities under or in connection with the transferring employees’ contracts of employment are transferred to the transferee.” – TUPE

In brief:

  • TUPE safeguards employees’ contracted terms and conditions when a business or contract is transferred from one owner to another,
  • Employees and, crucially, their contracts and rights are then subsumed by the new owners/providers,
  • Owners (old and new) must consult their employees who will be affected directly or indirectly by the transfer – failure to do so may incur the complaint being taken to the Employment Tribunal and may result in the employer paying compensation of up to 13 weeks’ pay to the claimant
  • Employees have the right to launch a case against employers for unfair dismissal, unpaid salaries, redundancy, personal injury, discrimination,
  • Employers, old and new can agree to share the TUPE liability,

Employees can choose to opt-out of TUPE but this then leaves them in a legally vulnerable position should their employment be terminated.  Fundamentally, the rights and terms and conditions of the employee cannot be altered to suit the best interest of the new employer.  If this occurs, and indeed if any adjustments are made to the employee’s contract as direct and evident result of the employment transfer the employee (depending on the individual details) may have every right to take their employer(s) to court.

Likewise, the incumbent owners are obliged to issue the new owners with written details of their transferring employees’ contract, rights, and liabilities.  This must be issued at least 14 days before the transfer, and failure to do so may incur costs per employee to the outgoing employer.

The mystification surrounding TUPE looks set to be resolved soon as the Employment Relations Minister, Ed Davey, confirmed that an employment law review will be initiated this year and will amongst other issues, look in to possible reformation of TUPE.

However, the review will be too late for Work Programme employees and employers as Employment lawyers look set to be kept busy.


Numerous Work Programme sub-contracts have been signed and there is concern by providers that they are being forced to take on TUPE liabilities in order to participate in the programme.

Many providers have very little financial reserves and they are stoking up significant problems downstream.

Whilst some prime contractors have accepted that TUPE does not apply for particular types of provision, this must be treated with caution, as the final decision of when and where TUPE applies is a legal decision and one that cannot be concluded by agreement between contracting parties. Ultimately it up to the individual employee to present their case and for the contracting provider to defend against this – if it so desires.


As far as some employees are concerned, TUPE seems to have been applied very unevenly across the supply chain and there seems to be a lack of consistent consultation between employers and employees.

Quite naturally no government department will be drawn on the detail of this, so everyone needs to be cautious when accepting and rehearsing comments from ministers or senior mandarins on whether or not, and to what degree TUPE applies.

There now appears to be a growing movement of individuals willing to take mass action.

Kuki Taylor

Research and Communications Officer

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