In plain terms
TUPE protects employees when the organisation they work for, or the work they do, moves to a different employer. Rather than treating the change as a dismissal followed by a fresh hiring, the law treats it as one continuous employment that simply carries across to the new employer, known as the transferee. The employer they leave is the transferor.
The Regulations cover two situations. The first is a business transfer, where a business, or a distinct part of one, is sold or otherwise transferred as a going concern and keeps its identity in the new hands. The second is a service provision change, which happens when a service is outsourced to a contractor for the first time, moved from one contractor to another on retendering, or brought back in-house. In each case the employees assigned to the organised grouping that carries out the work transfer automatically, on the same pay, seniority, holiday entitlement and other terms they had the day before.
Three protections sit at the heart of TUPE. Continuity of employment is preserved, so length of service is not reset. Terms and conditions transfer unchanged, and a variation made by reason of the transfer is void unless it falls within a narrow economic, technical or organisational (ETO) reason entailing changes in the workforce. And a dismissal is automatically unfair if the sole or principal reason is the transfer, again subject to the ETO exception. An employee may object to transferring, but if they do their employment usually ends without a dismissal and without redundancy pay.
Why it matters in a contract
TUPE turns what looks like a commercial deal into an employment event, so it shapes outsourcing agreements, service contracts, and business sale and purchase agreements. Whoever inherits the staff inherits their contracts and most accrued liabilities, which is why buyers and incoming contractors price TUPE risk carefully and negotiate warranties and indemnities to cover unknown employment claims.
The Regulations also impose hard deadlines that a contract has to accommodate. The transferor must give the transferee employee liability information about the affected staff not less than 28 days before the transfer. Both employers must inform and consult the appropriate representatives of affected employees in good time before it happens, and failure can trigger a protective award of up to 13 weeks’ gross pay per affected employee. Commercial contracts therefore commonly allocate these duties, set the timetable for exchanging information, and apportion liability if consultation goes wrong.
Because these obligations are date-driven and document-heavy, they are easy to miss in a busy transaction. A contract repository with renewal and deadline alerts keeps the 28-day information deadline and consultation milestones visible, while PactAI can extract the TUPE, indemnity and warranty provisions from a service agreement and score how the employment risk is allocated, so the human team can decide where to push back before signing.
Example
A facilities company holds a three-year cleaning contract for an office landlord. When the contract is retendered, a competitor wins it. Because the same cleaning service simply moves to a new provider, this is a service provision change under TUPE. The cleaners assigned to that contract transfer automatically to the winning bidder on their existing pay, shift patterns and length of service. The outgoing provider must supply employee liability information at least 28 days before the handover and consult the cleaners’ representatives, and the incoming provider cannot lawfully cut their pay simply because it now runs the contract. If the new provider dismisses cleaners solely because of the transfer, those dismissals are likely to be automatically unfair unless it can show a genuine ETO reason.
This is general legal information, not legal advice. Whether TUPE applies, and what each employer must do, depends on the specific facts and current UK law, so confirm the position with a qualified employment lawyer before you act.
Frequently asked questions
What is a TUPE transfer?
A TUPE transfer is the automatic transfer of employees and their existing contracts from one employer to another when a business or a service changes hands. It takes its name from the Transfer of Undertakings (Protection of Employment) Regulations 2006, which preserve employees' terms, continuous service and accrued rights when the transfer happens. The staff move to the new employer, the transferee, on the same terms they held with the old employer, the transferor.
What are the two types of TUPE transfer?
TUPE covers business transfers and service provision changes. A business transfer occurs when a business, or a distinct part of it, is sold or otherwise transferred as a going concern and keeps its identity in the new hands. A service provision change occurs when a service is outsourced for the first time, moved between contractors on a retender, or brought back in-house, and the employees assigned to that work transfer with it.
Do my terms and conditions change after a TUPE transfer?
No, your existing terms and conditions transfer to the new employer unchanged. A variation to those terms is void if the sole or principal reason for it is the transfer, unless it falls within a narrow economic, technical or organisational reason entailing changes in the workforce. Continuity of service is also preserved, so your length of service is not reset by the move.
Can an employer dismiss employees because of a TUPE transfer?
A dismissal is automatically unfair if its sole or principal reason is the transfer itself. An employer can still make a fair dismissal for an economic, technical or organisational (ETO) reason entailing changes in the workforce, such as a genuine post-transfer redundancy. Employees with the necessary qualifying service can bring an unfair dismissal claim in an employment tribunal if the ETO test is not met.
What is employee liability information under TUPE?
Employee liability information is the set of details the transferor must give the transferee about the transferring staff, such as identity, age, terms and any disciplinary, grievance or legal claims. The transferor must provide it not less than 28 days before the transfer, so the incoming employer understands the workforce and liabilities it is taking on. Failing to supply it can lead an employment tribunal to award compensation to the transferee.
Does TUPE transfer occupational pension rights?
Rights under an occupational pension scheme that relate to old age, invalidity or survivors are generally excluded from the automatic transfer under TUPE. However, transferring employees who were entitled to employer pension contributions may be entitled to a minimum level of pension provision from the new employer under separate legislation. Some other benefits, including certain early retirement or redundancy-linked rights, can transfer, so the position should be checked case by case.
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