FAQ/TUPE – what factors determine whether an employee is assigned to the transferring activities?

It’s a question that comes up time and again when businesses are involved in a TUPE transfer – what percentage of time does an employee need to spend on an activity for them to be assigned to it? It’s a crucial point, because only employees who are assigned to the organised grouping that’s transferring will go with it. But working out who is and isn’t assigned isn’t always straightforward, especially where roles are split across multiple clients or activities. 

So what’s the answer? On the line from Glasgow to help with that, Anthony Convery: 

Anthony Convery: “When it comes to determining whether someone is in scope to TUPE transfer it's not just about percentage of time. It's commonly thought that it's all about how much time someone spends on the activity and whilst that is a relevant consideration it's not just about that. If a tribunal is looking at whether TUPE applies the key test is whether the individual is assigned to the bit of the business that is transferring and there are many factors to be considered in, as well as just time spent.”

Joe Glavina: “So in your experience, Anthony, what factors are the ones that usually crop up in practice?”

Anthony Convery: “Well, it's absolutely the case that time spent is an important part of it, and that is probably the factor that people look at first and usually a good indication of assignment but it's not the end of the story. There are other factors like whether or not the employee is fully embedded within the transferring department, or the transferring service, and also looking at the economic value of the work that they're carrying out. So, how much does the employee contribute to the success of the transferring activities? Another factor is the contractual terms. We would look at, does the employee’s job description, or their contract, suggest that they're permanently assigned to the transferring bit of work? Then finally, cost allocation. How is their salary accounted for in the business? Is it accounted for within the bit of the business that's transferring, or within the activities that are transferring? Looking at that in the round will help determine whether TUPE applies.”

Joe Glavina: “What if the employee splits their time between different activities? I imagine that gets complicated.”

Anthony Convery: “It does, and this comes up a lot. If an employee works across multiple areas of the business, or they work across multiple areas of a particular contract and the contract is then split up when it's re-tendered, then determining whether they transfer is a very complex issue. If their role is substantially split then they may remain with the outgoing employer rather than transferring to the new employer but if they're primarily working in the bit of the business that's transferring then TUPE is more likely to apply. One thing that that has come up in recent years is in outsourcing. There is some unhelpful case law which would indicate that where there's a contract that has been awarded and then has been re-tendered, but when it's re-tendered it's fragmented across different incoming providers,  there is case law that would say that the individuals would transfer to multiple employers. So if an individual works on one contract and the contract is then split up, then the individual ‘s employment would transfer, potentially, to multiple incoming employers which, practically, doesn't really work and creates a lot of uncertainty in these situations and that's where employers really need to get specialist advice.”

We have added this programme to our FAQs series of programmes. To find them just type ‘FAQ/TUPE’ in the search engine of the Out-Law website.