If the business you work for changes hands, there are rules in place that protect you from any unfair disadvantage when your employment moves across to your new employer. These are called the Transfer of Undertakings (Protection of Employment) Regulations 2006, or ‘TUPE regulations‘.
Under the regulations, your contract of employment, with all its rights and obligations, should be preserved when transferred to the new, incoming employer. But while employers are generally not allowed to change transferring employees’ contract terms and conditions – including pay – as a result of the transfer, they may be able to make changes, including redundancies, if they can show certain exemptions apply.
For employees affected by a TUPE transfer, and potential changes to employment terms, it will be important to understand your rights early in the transfer process.
Both the outgoing and incoming employer are under duties to follow the correct legal procedures throughout the TUPE process, including consulting with affected employees, and through any related dismissal or redundancy processes.
The TUPE provisions are not optional for employers where the type of transfer fits the criteria under the regulations. If your employer fails to meet these standards, and you are subject to an unfair or discriminatory process, you may have grounds to bring a tribunal claim. If you are dismissed on account of the transfer, you may be able to claim automatically unfair dismissal.
This means transferring employment under TUPE can be a hugely concerning time for employees, even in scenarios that may initially appear straightforward. TUPE is a highly complex piece of legislation and TUPE transfers are a common cause for employment tribunal claims.
The following TUPE guide for employees explains your rights on transfer, the obligations on employers under the TUPE Regulations and what you can do if either your old or new employer get the TUPE process wrong.
What is a TUPE transfer?
A TUPE transfer refers to either a ‘business transfer’ or ‘service provision change’, collectively described and defined as a ‘relevant transfer’ under the TUPE Regulations. TUPE does not apply to every business transfer or service provision change, where there are various qualifying conditions to constitute a ‘relevant transfer’.
Broadly speaking, the TUPE regulations will apply when a company is either sold or merged with another business to create a new employer. It can also apply where activities are outsourced, brought in-house or a contract for services is moved from one provider to another, such as where a company takes over the contract for catering or office cleaning.
If the business in which you work changes owner, you may be protected under the TUPE Regulations, although this is often a contentious issue. If you’ve been told that you’ll be transferring from your current employer to a new employer and there is disagreement over the application of TUPE, or where you’ve been dismissed because of a transfer, you should seek expert legal advice from an employment law specialist as soon as possible.
When will TUPE apply?
Provided a relevant transfer takes place, TUPE will apply, regardless of the size of the organisation you work for, or whether the transfer results from a single transaction or series of transactions. However, the undertaking in question must be situated in the UK immediately before the business transfer. Alternatively, you must be part of ‘an organised grouping of employees’ situated in Great Britain immediately before the service provision change.
In the context of service provision changes, an ‘organised grouping’ must comprise a team of people dedicated to performing the activities in question on behalf of the client, although the organised grouping may have a single employee. Only those employees who can be clearly identified as providing the service being transferred are protected. The activities carried out by the new service provider must also be “fundamentally the same” and for the same client.
TUPE will not apply if the contract is for the supply of goods only, or for a single event or short-term task, such as a conference or an exhibition.
If there’s any disagreement as to whether you form part of the organised grouping of employees following a service provision change, or otherwise as to whether TUPE applies to the transfer in question, you should seek expert legal advice immediately.
Employee rights under TUPE
TUPE is designed to protect and preserve your rights as an employee. Where TUPE applies, employees who are employed in the undertaking which is being transferred have their employment transferred from the outgoing employer to the incoming employer.
The net effect of TUPE is to automatically transfer all assigned employees to the new employer on the same terms and conditions, with all their existing employment rights in place, but for certain occupational pension arrangements. Continuity of employment will also be maintained, where continuous service will be deemed to run from your original start date.
The idea behind TUPE is that your new employer will step into the shoes of your old employer, as though your contract of employment was originally made with them, transferring all existing statutory and contractual liabilities to the new employer. In practice, this means that almost all your employment rights will be preserved, including the right to bring a claim against your new employer for any failures of your previous employer to observe those rights.
Employees who transfer from an outgoing employer to an incoming employer are not regarded as dismissed under TUPE, so a transfer will not trigger any entitlement to pay in lieu of notice or redundancy pay unless there is an actual dismissal. However, a TUPE transfer can render any dismissal automatically unfair where the sole or principal reason for the dismissal is the transfer. In this way, your employment is protected from termination along with your terms and conditions and continuity of service. TUPE can also protect you from certain changes being made by your new employer to your contract of employment.
If you’re unsure of your rights relating to TUPE, a specialist employment law expert can help you to explore what practical and legal options are available to you, including if you’ve been unfairly dismissed or your working conditions are significantly worse because of the transfer.
What is the TUPE process?
Every TUPE transfer can be different, but the usual process will require your current employer to identify who will transfer, and to inform and consult with all affected employees. You’ll need to be told about any TUPE transfer if you’re being transferred to a new employer.
If you continue to be employed with your current employer but other staff will be transferring in or out, you should also be kept informed of the transfer, including any proposed changes to existing working practices arising from the transfer.
If there’s a trade union, your employer must inform and consult with the representatives from the union. If there’s no trade union, your employer must inform and consult with other employee representatives. There may already be representatives, or new ones can be specially elected. If the organisation that you work for has less than 10 employees, and no appropriate representatives, your employer can inform and consult directly with affected employees.
Before a transfer takes place, your employer must tell any appropriate representatives (or you, if consulting directly) in writing of:
- the fact the transfer is to take place and who it will affect
- the proposed date and the reasons for the transfer
- the possibility of any reorganisation
- the number of agency workers employed, the departments they’re working in and what type of work they’re doing.
If you’re transferring to a new employer, your current employer must also inform you of any changes that the new employer is planning to make. Under the TUPE regulations these are called “measures” and can include a change in location, different working patterns or working hours, changes to staff pay dates or any risk of redundancies.
There’s no set length of time for notice to be given to you of a TUPE transfer. Your employer is not ending your employment so they do not need to provide you with a prescribed notice period as they would in other circumstances, for example, if you were being dismissed. By law, however, your employer must give your representatives the necessary information long enough prior to the transfer taking place so that they can explain and discuss it with you. The time this will take depends on the size of the organisation and the numbers affected.
You should be invited by your employee representatives (or employer, if consulting directly) to provide feedback on any proposed changes. Your employer doesn’t have to agree to any suggestions made, although before making a final decision they do need to show that they’ve listened to what has been said and tried to resolve any issues. If agreement cannot be reached, your employer should provide you with a written explanation of their reasons.
Your current employer must also provide your new employer with specific information about you at least 28 days before you transfer. This is known as employee liability information (ELI).
If you need help in understanding the TUPE transfer process, you should talk to any trade union or employee representative. You may also want to seek expert legal advice, where your advisor can correspond with your employer to raise any understandable concerns that you may have about the way in which the TUPE transfer is being conducted.
What can you do if your employer gets it wrong?
By law, your employer must inform and consult with you when they make a TUPE transfer so that you’re made aware of changes to your employment. If you or your representatives have not been told about a TUPE transfer, including any of the information that must be provided, your employer will be in breach of the TUPE regulations.
If there’s a failure to comply with the statutory obligation under TUPE to inform and consult, a complaint can be put forward to the employment tribunal. This could result in an award of damages of up to 13 weeks’ uncapped pay for every affected employee, for which both your old and new employer may be jointly or severally liable.
Under TUPE, you’ll also be afforded certain protections against dismissal and changes to your contract of employment by reason of the transfer. If you’re dismissed by either your old or new employer either before or after a transfer, where the sole or principal reason for your dismissal is the transfer, it will be treated by a tribunal as automatically unfair. If the reason for your dismissal isn’t the transfer itself, it won’t be automatically unfair but it may still be an unfair dismissal if your employer hasn’t followed a proper redundancy or dismissal procedure.
If you believe that your terms and conditions have been substantially changed to your detriment before or after a transfer, you may have the right to resign and claim constructive unfair dismissal at a tribunal. TUPE classifies these types of resignations as dismissals. If the sole or principal reason for the change was the transfer, the dismissal will be treated as automatically unfair. If the reason for the change is not the transfer itself, the dismissal will be unfair if your employer acted unreasonably.
If you’ve been dismissed either before or after a transfer, or your terms and conditions are significantly worse or likely to be significantly worse because of the transfer, you should seek advice from a TUPE specialist at the earliest possible opportunity.
When TUPE applies it will afford you a significant amount of protection where you’re transferring to a new employer, both in terms of job security and the terms and conditions under which you will be required to work. However, failing to understand your TUPE-related rights, and acting upon a misconceived basis, could have serious consequences. In particular, if you tender your resignation or refuse to work for your new employer without good reason, or without first and formally raising objections, you would not normally be able to claim unfair dismissal or redundancy pay.
By seeking expert advice as soon as possible, this can help you to preserve your TUPE rights and explore all possible options if either your old or new employer gets it wrong.
DavidsonMorris’ employment lawyers are here to help employees concerned about the implications of TUPE on their employment rights and status.
Where your employer is looking to make changes to your employment contract or terms, take advice as soon as you can. Whether you are facing a potential pay reduction, redundancy situation or any change affecting your working conditions and contractual entitlements relating to a TUPE transfer, we can help.
We can scrutinise your employer’s reasons and justification for taking action and can identify issues or areas for challenge. We can help protect and uphold your rights during and after the transfer to ensure your current terms and conditions of employment are maintained and you are not treated any less favourably as a result of the transfer.
Timing will be critical. Whether you want to object to the transfer, negotiate new terms or negotiate an exit on terms favourable to you, we will provide guidance on next steps.
You may also have an existing workplace complaint or dispute, and are concerned about how this will be impacted by the transfer. All employment liabilities under statute and under contract pass to your new employer, and we can advise on how to ensure your rights continue to be enforced.
We can also advise on any concerns you may have about continuity of service, redundancy payments, both statutory and contractual, arrears of pay and accrual of holiday entitlement relating to a TUPE transfer.
For specialist advice, contact us.
TUPE for Employees FAQs
What does TUPE mean for employees?
TUPE is designed to protect and preserve your rights as an employee. Where TUPE applies, employees who are employed in the undertaking which is being transferred will usually have their employment transferred on the same terms and conditions.
What are my rights as an employees under TUPE?
The net effect of TUPE is to automatically transfer all assigned employees to the new employer on the same terms and conditions, with all your existing employment rights in place, together with continuity of employment.
How long does TUPE last for employee?
The period of protection afforded under TUPE is, in theory, indefinite. If the change to an employee's terms and conditions is because of the transfer itself, it will be prohibited, even if it happens years after the transfer took place.
What are the rules around TUPE?
The rules around TUPE are set out under the Transfer of Undertakings (Protection of Employment) Regulations 2006, as amended by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014.
Last updated: 1 July 2021