If a client changes supplier because it is not happy with the performance of the supplier's employees, can those employees be prevented from transferring to the new supplier if the contract change amounts to a TUPE transfer?
When a contract to supply services changes hands, this can amount to a TUPE transfer; all employees assigned to the contract will automatically transfer to the new supplier, regardless of the reason for the change. The Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) protect the rights of employees when a business or service transfers to a new employer; this includes the statutory right not to be unfairly dismissed. Failure by the transferee to engage employees who ought to have transferred is a dismissal in law and will be deemed to be an automatically unfair dismissal, having arisen directly as a result of the transfer. Employees in this situation must have two years' continuous service to claim unfair dismissal.
The transferee should deal with the individuals' underperformance under a disciplinary or capability procedure after the transfer, if such action has not already been undertaken effectively by the transferor.