TUPE, or the Transfer of Undertakings (Protection of Employment) Regulations, is a set of laws that govern the transfer of employees from one organization to another. The regulations were designed to ensure that employees’ rights are protected when a business or organization changes ownership or is taken over by another company. However, one question that many employers frequently ask is whether TUPE applies to framework agreements.
A framework agreement is a contract agreed upon by two or more parties that sets the terms of a future contract. Framework agreements are commonly used in public procurement, where a supplier is selected to provide goods or services to a public body. The supplier is then awarded a framework agreement, which sets the terms of the future contracts that will be awarded to them by the public body.
So, does TUPE apply to framework agreements? The answer is not straightforward, and it depends on the specific circumstances of the agreement. According to the TUPE regulations, a transfer of an undertaking occurs when there is a transfer of an economic entity that retains its identity. An economic entity is defined as a group of resources that are organized to pursue an economic activity, whether or not that activity is central or ancillary.
In the context of a framework agreement, the question of whether TUPE applies will depend on whether the supplier is considered to be an economic entity. If the supplier is considered to be an economic entity, then TUPE will apply if and when a transfer of that entity takes place. If, however, the supplier is not considered to be an economic entity, then TUPE will not apply.
Determining whether a supplier is an economic entity can be complex and will depend on the specific circumstances of the framework agreement. Factors that may be considered include the level of autonomy that the supplier has, the size of the supplier`s workforce, and the extent to which the supplier is integrated into the public body`s operations.
In conclusion, the application of TUPE to framework agreements is not straightforward, and it will depend on the specific circumstances of the agreement. Employers and organizations should seek advice from legal professionals to understand whether or not TUPE applies to their framework agreement. It is also important to ensure that any framework agreement is drafted with TUPE implications in mind, to avoid any potential legal disputes in the future.