Employers transferring whole/part of their business subject to the TUPE rules must provide prescribed information about their transferring employees to the incoming employer. For transfers taking place on or after 1 May 2014 this information, called Employee Liability Information, must be provided not less than 28 days before the business transfer. Previously the outgoing employer had 14 days in which to provide ELI.
In practice buyers often ask for more information than the seller is obliged to provide, at varying stages in the due diligence process. However prudent business sellers will be factoring this 28 day ELI time limit into their transaction time table so as to be legally compliant.
There is a “special circumstances” defence where it is not possible for commercial or other reasons for the seller to comply with this deadline, in which case the EI must be provided “as soon as reasonably practicable”. There is little case law on what amounts to such special circumstances but most obviously it will be where the sale takes place at very short notice.
This change in the rules is intended to provide greater certainty to incoming employers about their obligations to the transferring employees and to allow more time for practical preparations such as setting up payroll and HR systems.
The ELI to be provided is unchanged and includes key data about transferring employees such as:
- their identity, age and employment particulars
- disciplinary action and grievance raised in preceding two years
- relevant collective agreements
- legal action against the outgoing employer in preceding two years or potential legal action
If you are buying or selling a relevant business and require information about this change in the law or would like a copy of our TUPE fact sheets for buyers and sellers respectively, please speak to your usual adviser in the Employment team. Click here to meet the team.