TUPE: Your Rights When a Business Transfers

TUPE applies in two situations:

• Business transfers: When a business or part of a business is sold or transferred to a new owner as a going concern. The key test is whether the business retains its identity after the transfer.
• Service provision changes: When a service contract changes hands — for example, when a company outsources a service to a contractor, when a contract moves from one contractor to another on retender, or when a previously outsourced service is brought back in-house.

TUPE does not apply to the transfer of shares alone (where the company itself remains the same employer) or to sales of assets only (where the business itself does not transfer). Whether TUPE applies in any given situation can be complex and depends on the specific facts — seek advice from Acas or an employment solicitor if you are unsure.

When a TUPE transfer occurs, your employment automatically transfers to the new employer (the transferee) on the same terms and conditions. The key protections are:

• Your continuity of employment is preserved — your length of service with the old employer counts towards your entitlements with the new employer.
• All terms and conditions of your employment transfer — including pay, holidays, working hours, and contractual benefits.
• Any collective agreements with trade unions also transfer and continue to apply.
• Dismissal because of the transfer is automatically unfair, unless the employer can show an ETO reason (economic, technical, or organisational reason entailing changes to the workforce).
• Changing your terms of employment because of the transfer is generally void — even if you agree to it — unless there is an ETO reason.

Both the outgoing employer (transferor) and the incoming employer (transferee) must inform and, where applicable, consult employee representatives before the transfer takes place. The required information includes:

• The fact that a transfer is taking place, and the date
• The reasons for the transfer
• The legal, economic, and social implications for the affected employees
• Any measures the new employer plans to take in relation to the transferring employees

Consultation is required if either employer envisages taking measures in relation to the affected employees. In smaller businesses with fewer than 10 employees, employers can inform and consult directly with employees rather than through representatives.

Failure to inform or consult gives affected employees the right to claim compensation of up to 13 weeks' pay per employee at the Employment Tribunal.

Both the outgoing employer (transferor) and the incoming employer (transferee) have duties under TUPE. The transferor must provide Employee Liability Information (ELI) to the transferee at least 28 days before the transfer — this includes employee details, contracts, disciplinary records, and any ongoing claims. Failure to provide ELI can result in a minimum award of £500 per employee.

Both employers must inform and consult with employee representatives about the transfer. If there are "measures" planned (such as changes to terms or redundancies), consultation must cover those too. Failing to consult can result in a protective award of up to 13 weeks' uncapped pay per affected employee. TUPE does not prevent redundancies but they must be for an economic, technical, or organisational reason, not simply because of the transfer itself.

Since the 2006 Regulations, TUPE has covered not only traditional business sales but also service provision changes (SPCs). An SPC occurs when a service contract passes from one contractor to another on retender, when a client outsources a service for the first time, or when an outsourced service is brought back in-house. For an SPC to trigger TUPE, the activities carried out after the change must be fundamentally or essentially the same as before, and the group of employees assigned to the organised grouping must be identifiable.

In practice, service provision changes generate a large share of TUPE litigation because the boundaries of the doctrine are contested. Whether a particular outsourcing arrangement transfers is highly fact-specific. Employers and contractors should take legal advice at the planning stage — a failure to identify a TUPE transfer can result in the new contractor acquiring unexpected staff, or employees losing their jobs without the protections to which they were entitled.

The Employment Rights Bill 2024, which was progressing through Parliament when this guide was updated, did not fundamentally alter TUPE but introduced related changes to unfair dismissal qualifying periods and collective consultation rights. The Acas Code of Practice on Discipline and Grievance — which governs the procedures employers must follow during any post-TUPE restructuring — also remains relevant. Dismissals following a TUPE transfer that do not comply with the Acas Code can attract a 25% uplift on any tribunal award.

Where a TUPE transfer is anticipated, employees should:

• Request information in writing from their current employer about the transfer date, the new employer, and any planned measures
• Check whether their union (if any) is involved in consultation
• Record and challenge any proposed changes to contractual terms, especially pay, hours, or location
• Seek Acas or legal advice before deciding whether to object to the transfer or accept a settlement agreement

One often overlooked point in TUPE contexts is the interaction with collective redundancy obligations. If the incoming employer intends to make 20 or more redundancies within 90 days of the transfer (or plans to do so as a consequence of the transfer), the employer must comply with the collective consultation obligations under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). This requires at minimum 30 days' consultation before the first dismissal (45 days if 100 or more redundancies are proposed). Failure to comply can result in a protective award of up to 90 days' gross pay per affected employee — in addition to any TUPE-related claims. If you are at risk of redundancy shortly after a TUPE transfer and no collective consultation has taken place, raising this point with Acas at the Early Conciliation stage can significantly strengthen your negotiating position.