Redundancy during or connected to a TUPE transfer is one of the most legally sensitive situations in UK employment law. The default position is clear: any dismissal where the sole or principal reason is the transfer is automatically unfair. However, there are narrow circumstances where redundancies may be lawful.
The Default Rule
Under Regulation 7(1) of TUPE, a dismissal is automatically unfair if the sole or principal reason is:
- The transfer itself, or
- A reason connected to the transfer that is not an ETO reason
This applies to both the outgoing and incoming employer. Neither can dismiss employees simply because of the transfer — for example, to make the deal more attractive or to avoid inheriting certain employees.
When Redundancy May Be Lawful
Redundancies connected to the transfer can be fair if there is a genuine ETO reason entailing changes in the workforce. In practice, this means:
- A genuine reduction in the number of employees needed (redundancy in the traditional sense)
- A genuine change in the functions of employees (reorganisation of roles)
- A genuine change in the location of the workforce
The key word is "genuine" — the reorganisation cannot be a device to get around TUPE protections.
Timing Matters
- Before the transfer (by the outgoing employer): Rarely defensible unless the redundancy is entirely unconnected to the transfer. Courts are sceptical of pre-transfer redundancies.
- At the point of transfer: Very difficult to justify. The closer to the transfer date, the stronger the presumption that the transfer is the reason.
- After the transfer (by the incoming employer): More defensible if the incoming employer can demonstrate a genuine reorganisation based on their own business needs. However, the connection to the transfer will still be examined.
The Fair Process Still Applies
Even where an ETO reason exists, the employer must still follow a fair redundancy process — consultation, fair selection, consideration of alternatives, and proper notice.
Considering redundancies during a TUPE transfer? This requires specialist advice. Our TUPE team can help you navigate the risks. Contact us immediately.