Understanding TUPE: When It Applies and When It Doesn’t

What is TUPE and Why It Matters for Your Business

TUPE stands for Transfer of Undertakings (Protection of Employment) Regulations 2006. It ensures that, when a business or service is transferred, employees keep their contracts, service continuity and accrued rights with no break in employment. For a UK businesses, TUPE is vital because it:

  • Protects your workforce from unexpected job loss or changes in terms.
  • Maintains staff morale by preventing uncertainty during takeovers or outsourcing.
  • Shields your business from costly tribunal claims by ensuring legal compliance.

By understanding TUPE early, you safeguard both your employees and your reputation, reducing disruption and fostering trust.

When does TUPE Apply?

1. Business Transfers

Occurs when a whole or part of a business moves to a new owner, including sales, mergers or management buyouts.

2. Service Provision Changes

Applies where an organised group of employees providing a service (e.g., cleaning, catering) moves due to:

  • Outsourcing (in-house to contractor)
  • Re-tendering (contract ends, new contractor starts)
  • Insourcing (contract ends, work brought back in-house)

Employees clearly assigned to that service transfer with their terms intact.

business transfer

Examples of When TUPE Does Not Apply

  • Share-only transfers: Sale of shares without change in employer identity.
  • Name changes: Company renaming with no change in legal entity or practices.
  • Supply of goods: Contracts for goods only (e.g., supplier swap).
  • Single-event services: Short-term tasks such as one-off events.

Understanding these exceptions helps you determine when TUPE obligations do—or do not—apply.

Protections for Transferring Employees

  • Automatic transfer: All eligible staff move to the new employer on existing contracts, preserving pay, benefits and continuity.
  • Dismissal protection: Dismissals are automatically unfair if for transfer reasons; valid ETO-based dismissals still require fair procedure.
  • Right to object: Employees may object and terminate employment before transfer, but this is treated as resignation without compensation.

These safeguards maintain stability and confidence among your workforce.

Employer Responsibilities

Outgoing Employer

  • Provide detailed employee liability information at least 28 days before transfer.
  • Inform and consult trade unions or employee representatives about transfer details, timing and implications.
  • Facilitate elections for representatives if needed (thresholds: 50+ employees or 10+ transferring).

Incoming Employer

  • Review due diligence on employee terms, liabilities and collective agreements.
  • Continue existing terms and conditions, honouring collective agreements and holiday accruals.
  • Consult with representatives on any post-transfer measures planned, seeking agreement where possible.

Proactive compliance minimises legal risk and promotes a collaborative culture.

ownership transfer

Practical Tips for Smooth TUPE Compliance

  1. Early Engagement: Start TUPE assessment in initial deal discussions to identify affected staff.
  2. Dedicated TUPE Lead: Appoint a project manager to co-ordinate information flows, consultations and documentation.
  3. Clear Communication Plan: Use consistent messaging to explain what TUPE means for individuals, addressing concerns openly.
  4. Training for Managers: Equip line managers with TUPE basics and best practice consultation techniques.
  5. Post-Transfer Onboarding: Implement a welcome programme for transferred employees, reinforcing their value and integrating cultures.

FAQs

How long before transfer must we inform employees?

You must provide information 28 days before transfer, or sooner if possible, and consult on any planned measures.

Can we change pay rates after transfer?

Not if the change is solely because of the transfer—any variation must be follow fair consultation.

Which employees transfer under TUPE?

All employees assigned to the part of the business or service that is transferring, including part-time and fixed-term staff.

What if we fail to consult?

Affected employees may bring tribunal claims if an employer fails to consult.

Navigating TUPE can feel daunting, but you don’t have to do it alone. Contact us today for a consultation, and let us help you protect your people and your business.