TUPE

If your business is undergoing a sale or other transfer of shares or assets, or if you are acquiring all or part of another business, or if you are outsourcing or insourcing, won or lost a contract the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) will often be a critical issue in the transaction.

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The legislation is complex and technical, and may not apply in every case, but legal input at an early stage is key in protecting your business against potential claims.

Where TUPE applies, it may provide protection to affected employees and preserve their employment during any transfer. There will also be other legal obligations on you as their employer, such as a duty to inform and consult with any employees that may be affected. TUPE is often misunderstood to apply only to large operations, but it can apply to small businesses and even if there is only one employee.

Unfair dismissal claims arising from TUPE are common. Defending Tribunal litigation is costly both financially and in management time. Input from legal advisers early on in any transaction can help mitigate the risk of subsequent claims.

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Frequently asked question

TUPE applies when there is either a business transfer or a service provision change, such as outsourcing, insourcing or a change in service provider. If TUPE applies, employees assigned to the undertaking or service automatically transfer to the new employer on their existing terms and conditions.

For business owners and HR teams, the most important question is whether the change you are planning genuinely meets the legal test. Some restructures fall outside TUPE, particularly where the activity is fundamentally different, fragmented, or stops entirely.

We regularly advise employers across Bedfordshire and Hertfordshire, and nationally, on whether TUPE applies and how to structure transfers in a way that is compliant, commercially sensible and minimises risk.

Both the outgoing and incoming employer have specific duties to inform and, where appropriate, consult with affected employees or their representatives. This includes providing prescribed information about the transfer, its timing, the reasons for it, and any measures you expect to take as a result.

If you have 10 or more employees and there are no existing representatives, you will usually need to arrange an election process before consultation can begin. Failing to inform and consult properly can lead to protective awards of up to 13 weeks’ pay per employee, so timing, communication and documentation are critical.

We support employers with every stage of the process, from preparing information to managing consultations efficiently and lawfully.

Changes to terms and conditions following a TUPE transfer are heavily restricted. Employers generally cannot make changes if the sole or principal reason is the transfer itself, even if employees appear willing to agree.

Changes may be possible where there is a genuine economic, technical or organisational (ETO) reason involving changes in the workforce, or where the change is entirely unrelated to the transfer. However, “harmonisation” of terms is rarely lawful.

We help employers understand what is and is not possible, assess the risks, and plan any required organisational changes in a way that is compliant and commercially workable. Our team supports businesses locally and nationally, with pragmatic advice on post‑transfer changes.

Yes. TUPE transfers all existing rights, liabilities and obligations connected with transferring employees to the incoming employer. This includes historic issues such as unpaid wages, accrued holiday, discrimination allegations or ongoing disciplinary matters, even if the new employer is unaware of them.

This is why robust due diligence and carefully negotiated indemnities in commercial agreements are essential. Employers often underestimate the financial and operational impact of inherited liabilities if this stage is overlooked.

We help employers identify risks early, negotiate appropriate protections and manage TUPE obligations in the context of business sales, outsourcing arrangements and complex service contracts.

Redundancies connected to a TUPE transfer are particularly risky and can be automatically unfair if not handled correctly. Employers must carefully assess whether any proposed redundancies arise from genuine economic, technical or organisational (ETO) reasons and whether they relate to changes in the workforce.

In many cases, consultation responsibilities may fall on both the outgoing and incoming employer, and timing is crucial. Planning early is key to ensuring the process is lawful, coordinated and minimises disruption.

We work closely with business leaders and HR teams to plan restructures and workforce changes that align with TUPE requirements and protect the organisation from avoidable claims.