If the TUPE regulations apply to the circumstances in which you have taken the staff on then you will be required to continue to employ them on their existing terms and conditions rather than imposing your own, subject to two specific exemptions (see below).
'TUPE' stands for 'Transfer of Undertakings (Protection of Employment)'. The purpose of the TUPE regulations is to protect employees if the business or undertaking in which they work changes hands. The effect of TUPE is that employees transfer with the business or undertaking, on the same terms and conditions and with their length of service preserved and are protected against having their terms and conditions changed.
Whether TUPE applies to you taking the staff in question is therefore the central issue. TUPE applies to a transfer of a business or undertaking where what is transferred is an 'economic entity' that retains its identity after the transfer. TUPE also apples to contracting out and contracting in exercises and to changes of contractor, all three of which TUPE refers to as 'service provisions changes'.
If the staff came to you because you are contracting services to the council then this is likely to be a service provision change to which TUPE applies. If you are not contracting services to the council then whether or not TUPE applies will depend on precisely what was transferred to you from the council. As well as the staff you may have acquired some (tangible or intangible) assets. TUPE will apply if what has been transferred amounted to an 'organised grouping of resources that has the objective of pursuing an economic activity, whether or not that activity is central or ancillary'.
If TUPE does apply then any change to the terms and conditions of the transferred staff will be void. The exceptions to this are (1) if the change is either entirely unconnected to the transfer or (2) if it is made for an 'economic, technical or organisational reason entailing changes in the workforce'. If you want to impose your terms and conditions on the former council staff in order to harmonise their contracts with your other employees then unfortunately it is unlikely that either of these exceptions would apply.
This information was also published in Personnel Today on 15 April 2010.