TUPE is one of the most complex areas of UK employment law — and one that catches businesses out more than almost any other. The Transfer of Undertakings (Protection of Employment) Regulations 2006 (as amended) protect employees when the business they work for, or a service they deliver, transfers to a new employer. Understanding when TUPE applies is the essential first step.
Two Types of Transfer
1. Business Transfers
A transfer of an economic entity that retains its identity. This covers situations such as:
- Sale of a business or part of a business
- Merger or acquisition
- Transfer of a going concern
The key question is whether an organised grouping of resources (people, assets, activities) transfers and retains its identity in the hands of the new employer.
2. Service Provision Changes
A service provision change occurs when:
- Outsourcing — a client contracts out a service to a contractor for the first time
- Re-tendering — a contract transfers from one contractor to another
- Insourcing — a client brings a previously outsourced service back in-house
For TUPE to apply, there must be an organised grouping of employees whose principal purpose is carrying out the activities in question.
What Happens When TUPE Applies
- Affected employees automatically transfer to the new employer
- Their existing terms and conditions transfer with them
- Continuity of employment is preserved
- The new employer inherits all employment liabilities
- Dismissal because of the transfer is automatically unfair (unless there is an ETO reason)
Who TUPE Does Not Cover
- Self-employed contractors (unless they are actually workers or employees in disguise)
- Supply of goods only (without a service element)
- Single-event or short-term contracts (typically)
- Share sales (the company stays the same — only ownership changes)
TUPE transfers require careful planning and execution. Our TUPE guidance service supports both incoming and outgoing employers through the process. Get expert advice.