What does TUPE mean for employers?
When a business or service transfers to a new employer, TUPE usually moves the assigned employees across automatically on their existing terms, with continuous service and the old employer's liabilities. Both employers must inform and consult representatives, the old employer must pass on employee information at least 4 weeks before transfer, and dismissals because of the transfer are automatically unfair.
When TUPE applies
GOV.UK says the size of the business does not matter. Contracts wholly for the supply of goods, or for a single event or short-term task, are not covered, and only employees clearly identified as providing the service transfer.
- Business transfers, where a business or part of one moves to a new employer and the employer's identity changes
- Service provision changes, where a service is outsourced, moves to a new contractor or is brought back in-house
What transfers
The new employer takes on employment contracts, terms and conditions, continuity of employment, holiday entitlement, collective agreements and the old employer's failures towards employees, such as discrimination claims. Pension rights earned up to the transfer are protected, but the new employer does not have to continue an identical pension. An employee can object, which ends their employment at the transfer and normally works like a resignation.
Informing and consulting
Long enough before the transfer, employers must tell trade union or employee representatives the date and reasons, the implications, any planned measures and agency worker use, and consult about measures. For transfers completing on or after 1 July 2024, employers with fewer than 50 employees, or transferring fewer than 10, can consult employees directly if there are no representatives.
Changing terms and dismissals
GOV.UK says employers cannot normally change terms because of the transfer itself, even if the employee agrees. Changes or dismissals for an economic, technical or organisational (ETO) reason entailing changes in the workforce may be possible, but normal fairness rules apply. Acas says redundancy consultation can start before transfer but selection should not happen until after it.
The law
“shall have effect after the transfer as if originally made between the person so employed and the transferee…”
“economic, technical or organisational reason entailing changes in the workforce…”
“long enough before a relevant transfer to enable the employer of any affected employees to consult…”
Sources
- Business transfers, takeovers and TUPE · GOV.UK
- TUPE transfers · Acas
- Step 4: Hold consultations - Managing a redundancy process · Acas
General information for employers in Great Britain, not legal advice. Check the official sources for your situation.
What employers can do
- Confirm early whether the deal is a business transfer or service provision change
- Identify which employees are assigned to the transferring work
- Provide employee liability information at least 4 weeks before transfer
- Inform and consult representatives, or arrange elections, in good time
- Avoid harmonising terms because of the transfer; take advice on any ETO reason
- Issue updated written statements after the transfer
Recent tribunal decisions on this topic
Tribunal tracker- Parravox Ltd (In Voluntary Liquidation) Breach of contractTransfer of undertakingsUnfair dismissal Read the decision on GOV.UK
Being listed does not mean a claim succeeded. Read the decision for the outcome; decisions can be reconsidered or appealed. If a listing concerns you, or a decision has since been anonymised or removed, tell us and we will review it and remove it where appropriate.
Related answers
- What are the rules on redundancy consultation? Employers should consult every affected employee before deciding on redundancies. If 20 or more redundancies are proposed at one establishment within 90 days, collective consultation with representatives must begin at least 30 days (45 days for 100 or more) before the first dismissal, and form HR1 must be submitted. Failure can lead to a protective award of up to 180 days' pay per employee.
- What are the new rules on fire and rehire? From March 2027 (expected, subject to Parliament), dismissing an employee for refusing a change to core terms such as pay, hours, pensions, leave or certain shift patterns will be automatically unfair, unless the employer meets a narrow financial difficulties exemption. Dismissing employees to replace them with non-employees doing substantially the same work will also be automatically unfair in most cases.