Holidays and what happens if a TUPE occurs?

Holidays and what happens if a TUPE occurs?

July 28, 2022

One of the common complaints we hear after a transfer of undertakings (TUPE) is finding out as a transferee (the incoming employer) that the transferor has transferred the staff with huge amounts of outstanding annual leave.

When planning a transfer what can you do?

We would strongly advise that transferees insist as part of your due diligence that the transferor ensures that any accrued and untaken holiday has been given to the employees before transfer. This will by effect, will reduce your liability to pay out for holiday accrued when you did not operate the provision.

Points to remember…

Holiday is paid at the rate of pay when it is paid/taken not when it was accrued. Therefore this is particularly important when the transfer is after April 1st when the national minimum wage increases every year.

Employee Liability Information (ELI) which in a TUPE is shared no later than 28 days before a transfer does not need to include outstanding holiday entitlement but it is not a bad idea to ask about this.

Watch out for silliness such as…

Some transferors think they are being clever if they refuse to authorise holiday requests whilst the sale is going through, only for the incoming employer to be faced with the cost after the transfer.

Good record keeping is essential when it comes to holiday and finding out key members of your new team have been authorized to take leave at your busy time can also be a headache for transferees.

I’ve heard horror stories of employers who found that their Nursery Manager has been granted 2 weeks from the start of September by transferors in June, who then went on to sell their business on 31st August. No one would want their Nursery Manager out for the first two weeks of the business being transferred but as an employer it is hard to cancel an employee’s leave request once authorised.

If you need any assistance with any aspect of holidays and TUPE, please contact the team on 01527 909436.

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