TUPE: when it applies and what employers must do

TUPE — the Transfer of Undertakings (Protection of Employment) Regulations 2006 — protects employees when a business or part of a business is transferred. The basic principle is that affected employees transfer automatically to the new employer on their existing terms and conditions.

When TUPE applies

TUPE applies in two main situations:

1. Business transfers

A business (or part of one) is sold or transferred as a going concern — the buyer continues to run the same operation. Common examples:

• Sale of a business as a going concern.
• Acquisition of part of a business.
• Sale of assets where the operation continues.

2. Service provision changes

A service is:

• Outsourced (in-house to contractor).
• Brought back in-house (contractor to in-house).
• Re-tendered from one contractor to another.

The service must remain fundamentally the same — same activities, same clients, same purpose.

What TUPE does

• Employees transfer automatically on their existing terms and conditions.
• Continuity of service is preserved — pre-transfer service counts for redundancy, unfair dismissal, holiday entitlement, sick pay etc.
• The new employer steps into the shoes of the old employer.
• Varying terms because of the transfer is void — even with the employee's consent.

Information and consultation

Both the outgoing and incoming employer have obligations:

• Inform appropriate representatives (recognised trade union, or elected employee representatives) of: the fact of the transfer, the date, the reason, the legal/economic/social implications, and any measures envisaged in connection with the transfer.
• Consult representatives where measures are envisaged.

Information must be provided in good time — long enough before the transfer for meaningful consultation.

Protective awards for I&C failure

Failure to inform and consult can result in awards of up to 13 weeks' pay per affected employee. Note this is separate from the redundancy collective consultation protective award (doubled to 180 days from April 2026).

Dismissal because of TUPE

Dismissal by reason of the transfer is automatically unfair, unless it is for an economic, technical or organisational (ETO) reason entailing changes in the workforce.

ETO reasons are narrowly construed — restructuring to reduce headcount can be an ETO reason; cherry-picking employees to retain is not.

Employee Liability Information

The outgoing employer must provide Employee Liability Information to the incoming employer at least 28 days before the transfer, covering:

• Identities and ages of employees.
• Terms of employment (statement of particulars).
• Information about any disciplinary action in the last 2 years.
• Any pending claims.
• Collective agreements.

Failure to provide ELI can result in compensation of at least £500 per employee affected.

Common TUPE issues

• Failing to identify a TUPE transfer. Service provision changes are frequently missed.
• Late or inadequate consultation. "Informing" employees a week before the transfer is not enough.
• Trying to harmonise terms post-transfer. Variations connected to the transfer are void.
• ETO dismissals that aren't really ETO — usually fail.

Official source: GOV.UK — Transfers and takeovers.