What do a pub in Stratford and Mitie have in common?
TUPE problems are like buses.
You wait ages for one, and then several arrive at once.
(If you don’t know what “TUPE” is, here’s a quick lowdown: TUPE stands for “Transfer of Undertakings (Protection of Employment) Regulations” and these regs are basically in place to preserve employees’ terms and conditions when a business is transferred to a new owner)
If you’ve ever bought a business and taken on the staff, or you intend to at any point in the future, it’s vital you understand TUPE.
If you don’t you could end up in hot water.
Generally speaking, most sellers have got all the necessary information on their staff organised, legible and in a position to be handed on quickly to the new owner.
But not always.
In the last week alone, Mitie have been guilty of this, as well as a pub that we’re now working with in Stratford.
Mitie lost a cleaning contract to our client, but they’ve been unable to provide the correct employee information to the new contractor.
Similarly, the pub has the same problem. The new owners bought the establishment and retained the staff, but the previous owner gave them incorrect employee information a full three months after the transfer.
Oh, and as a cherry on top, he’d never issued contracts to his staff.
But what can they do about it?
You can get £500 per employee for incorrect or missing information in a TUPE transfer. This can be payroll information, or it can be a “heads up” about potential tribunal claims.
So if you take over 10 staff, then the previous owner would have to pay you £5,000 for not giving you the information they are legally required to do.
There was a case in 2014 where the previous employer had to pay a total of £65,500 – £500 for each of its employees – because they failed to notify the new employer of potential tribunal claims due to non-payment of salaries, and those liabilities had been automatically transferred to the new owner.
If you have not been able to get the correct, or any, information out of the business owner who is selling to you, then you can go – free of charge – through ACAS Early Conciliation.
You’d start a case as an individual (not employer) and then complete the very short form about why you feel you are owed the compensation.
You could easily end up with £500 per person, and no legal costs.
You do however need to do this within 3 months of the transfer, just as a disgruntled employee would need to do.
This is another string to your bow to “persuade” the seller to give you the correct information, otherwise they will have less money in their pocket – always clarifies priorities, I usually find!