Employment warranties and indemnities factsheet

Filed Under: TUPE - Factsheets | Published on: Wednesday, 08 February 2012 09:56 AM

Warranties

In a TUPE situation, an employment warranty is a form of assurance given in a contract about some aspect of the  employment affairs within the undertaking.  If the warranty is incorrect, the person in receipt of the warranty (typically the transferee) will be able to sue for breach of warranty – but only if the person in receipt of the warranty can show that the breach has caused it loss (e.g.  the overall value to it of gaining the contract has been reduced).  Often there will be financial caps on the amount of losses that can be recovered or minimum losses that must be incurred before monies can be recovered.

Warranties need to be given not only on exchange of contracts, but also on completion of the deal in case the position changes in the meantime.

Examples of warranties a transferee should seek include:

SEARCH TERMS: HR, EMPLOYMENT, BREACH, TUPE, TRANSFEREE, EMPLOYER, EMPLOYEE, CONTRACTS, WARRANTY, LOSS, INDEMNITY
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