Are there TUPE implications for the incumbent contractor, if the business has been outsourced before, when they lose the contract to another contractor?
Are there TUPE implications for the incumbent contractor, or for the new contractor, if the business had been outsourced before, when the contract is lost by the incumbent to another contractor?
Many people think of TUPE in the context of a change of ownership of a business, for example, when a business is sold from one employer to a new employer. However, it is important to think of the implications of TUPE when outsourcing a service e.g. catering, cleaning, security, IT, technical support, etc.
A transfer of undertakings is governed by the Transfer of Undertakings Regulations (TUPE) which protect the terms and conditions of employees when transferring from one employer to another employer in a TUPE situation. In a TUPE situation, the employees transfer from the ‘old’ employer to the ‘new’ employer with the same terms and conditions of employment (except pensions) as they currently have.
TUPE can apply in an outsourcing situation, however, TUPE does not automatically apply to every outsourcing situation in Ireland.
Similarly, a changeover of contractors is not automatically a TUPE.
In an outsourcing situation, for a TUPE to exist, there must be a transfer of significant tangible or intangible assets or the transfer of the major part of the workforce. Thus, for example, in a contract catering situation, if catering equipment and a large number of catering staff transferred to the new contractor, a TUPE would exist. However, if there was no transfer of equipment or staff, it may be that a TUPE does not exist.