What is TUPE, and what does it mean when tendering?

What is TUPE?

The Transfer of Undertakings (Protection of Employment) Regulations 2006, or TUPE, is in place to protect the entitlement of UK employees so that they retain the same terms and conditions as they had before a business transfer or service provision change.
In tendering terms, this means ensuring existing employees, on the current iteration of a contract, are able to retain the same rights when a new provider takes over. Whilst the new provider can propose measures to amend existing terms, this must be done with caution to avoid the risk of employee litigation. Employees have the right to terminate their employment and claim constructive unfair dismissal at a tribunal, potentially causing significant financial and reputational damage, if successful.

Why and how does TUPE apply?

In tendering, TUPE applies to organisations of all sizes and can be relevant to contracts of any value or size – but not all. For example, a service where there is no outgoing provider will not have any staff to transfer over, with recruitment the responsibility of the new organisation.

In many cases, TUPE requirements are clearly stated within tender documents (i.e. stating whether they will or will not apply), accompanied by a list of anticipated, eligible transfer numbers and their current employment conditions, anonymised in line with GDPR requirements. For example, including but not limited to:

Position title
Gross annual salary
Contracted hours and actual hours worked
Overtime rates
Service start date
Employment status (e.g. self-employed, freelance, etc.)
Pension scheme membership
Annual leave and sick pay entitlement
Unresolved employment claims
Contractual notice periods.

Using this information, tenderers can make an informed decision on whether they have the financial and operational capacity to accommodate the number of staff transferring and their current terms and conditions. When submitting the bid, tenderers are typically asked to sign-off their understanding of the TUPE requirements, evidencing their commitment to carrying out their obligations and awareness of penalties and legal issues if not managed appropriately.

What should organisations do when TUPE does apply?

TUPE requirements can vary significantly between tenders, from one individual for a small security contract or hundreds of health workers for a large homecare service. It is therefore critical that tenderers analyse TUPE information carefully when deciding whether or not to bid to confirm their capability.

A few essential yet straightforward steps organisations can do to improve their understanding of TUPE include:

Submitting a clarification to the buyer if unsure about the accuracy or comprehensiveness of data provided. For example, if annual salaries are omitted from overviews. There may be a reason why a buyer has not provided this information, but a suitable explanation should be offered to enable the organisation factor in costs.
Assessing employment contracts for key areas of concern such as annual leave entitlement, pension agreements, etc., integrating these into overall contract costs, recruitment strategies and service delivery models.
Analysing the pricing document to ensure any TUPE-related costs are accommodated into the organisation’s overall commercial submission.

How do you answer TUPE-related tender questions?

As part of the quality submission in a tender, TUPE may be addressed in a stand-alone question or as a sub-point under a wider topic, such as mobilisation, recruitment or service delivery. As always, responses should be tailored to the exact question asked, however, typical areas that could be addressed in TUPE questions to evidence an organisation’s understanding and consideration of TUPE include:

Referencing legislation and any associated guidance, such as briefings from ACAS, to showcase wider knowledge and how it is relevant to the tender response.
A clear timeline of activities that will take place to ensure key activities are carried out in advance of the contract start date. For example, allowing at least two weeks between first and second consultations, ensuring initial queries can be investigated and transferring employees have time to make their decision.
Detailing experience and how employees were successfully transferred using TUPE regulations in the past – for example, how many employees were transferred for a previous contract and remain with the service two or three years on?
References to where the organisation has obtained legal or HR advice to maximise the fairness and compliance of the TUPE process.
Any added value the organisation brings that is above and beyond legal requirements. How will you help TUPE-regulated employees settle into the business once transferred? Will they be assigned a buddy to help them adapt to the team culture, whilst providing an opportunity to share advice from someone who was involved in the previous iteration of a contract?

TUPE responses should be focused on the needs of the individuals being transferred, so a personal approach should be adopted throughout, prioritising employee welfare from point of transfer to employment duration. This will evidence to the buyer how the organisation views TUPE not just as a legal requirement, but an opportunity to deliver a service using the skills and experience of existing staff, improve workforce diversity and strengthen their business.

If you are struggling with a TUPE question in your ITT submission, or for further details on the specialist writing services and training courses offered by Executive Compass, please contact us to discuss how we can help.