So, you’ve heard the term- but what does it really mean? And when does it apply? Confusion can arise easily around this
To understand why TUPE exists and what it’s for, we should take the employee’s view. When a company sells part of its business to a new owner an employee is faced with major risks if it weren’t for TUPE regulations. Without
TUPE applies in two situations1:
When considering employee health and protection benefits this means that provisions such as private medical insurance and life assurance need to be replicated as far as possible by the new owner of the contract.
Now, that’s very easy to say, but not so easy to do. If you aren’t an expert in group benefits how can you be sure you are meeting the needs of these regulations? The penalties for a mistake or inconsistency between the previous and replacement provisions could be significant. Nobody wants action to be taken against their company for non-compliance when they were only trying to do the right thing.
A big challenge for employers experiencing TUPE is the scope of cover available in the market. Often the group of employees transferring is small and there may be only a couple or more individuals involved in the move. Where the move is from a larger organisation to a smaller one it’s often quite challenging to find a fit for the type of benefits the employees previously had in place.
Our schemes at Elect are designed for smaller groups and offer benefits that are ordinarily only available to much larger companies, making it easier to access like-for-like designs. The terms available through Elect for Medical History Disregarded underwriting on our Private Medical Insurance plans for groups as small as one employee
TUPE transfers happen all the time; it’s a part of the day to day world of business and it’s important you work with the right company to help satisfy them.
Samuel Bain, Consultant
1 CIPD “A Guide to TUPE Transfers”
This article is for information only and is not specific advice. It is based on our current understanding of the attributed research which may change in the future.