TUPE Explained 2026: Employer Guide to Staff Transfers

The Transfer of Undertakings (Protection of Employment) Regulations 2006, commonly referred to as TUPE, form a key part of UK employment law. The regulations are designed to protect employees where a “relevant transfer” takes place, meaning either a business transfer or a service provision change, and the business or service they work for transfers to a new employer.

For employers, TUPE can introduce significant legal obligations and risks. A transfer may arise when a business is sold, when operations are outsourced to a contractor, when work previously outsourced is brought back in-house, or when a service contract moves from one provider to another. In these situations, employees assigned to the transferring activity will usually move automatically to the incoming employer, together with their existing contractual rights and employment history under their employment contract.

TUPE transfers therefore affect both incoming employers (transferees) and outgoing employers (transferors). Each party must comply with statutory duties around consultation, information disclosure and the preservation of employment rights. Failure to follow the correct process can lead to substantial liability in the employment tribunal.

For organisations involved in corporate transactions, outsourcing projects or service contract changes, understanding how TUPE operates is essential. Employers must assess early in any proposed transaction whether TUPE may apply, identify which employees are likely to transfer and ensure compliance with the legal framework governing the transfer.

What this article is about

This guide provides a detailed overview of TUPE for UK employers. It explains what TUPE means, when the regulations apply, how the transfer process works and what rights employees retain when their employment transfers. It also examines employer duties around consultation and employee liability information, together with the legal restrictions on changing employment contracts or making redundancies after a transfer.

Section A: TUPE Meaning & When It Applies

TUPE only applies where there is what the legislation refers to as a “relevant transfer”. Understanding when a relevant transfer arises is therefore the starting point for determining whether the regulations apply to a particular transaction or service change.

In practice, many business reorganisations and outsourcing arrangements can trigger TUPE, but not every commercial transaction will fall within the scope of the regulations. Employers must carefully analyse the structure of the proposed change to determine whether TUPE protections apply.

Where TUPE does apply, the employment of affected employees will normally transfer automatically to the new employer, together with most rights and liabilities connected with their employment.

1. What is TUPE?

TUPE refers to the Transfer of Undertakings (Protection of Employment) Regulations 2006, which implement the UK’s framework for protecting employees where a relevant transfer takes place.

The central principle of TUPE is that employees assigned to the transferring business or activity will move automatically to the incoming employer on the transfer date. Their employment contracts continue as if originally made with the new employer, and their continuity of service is preserved.

This means the new employer steps into the position previously held by the old employer, inheriting most of the rights, duties and liabilities connected with those employees’ employment. For example, employees will generally retain:

• their salary and contractual pay arrangements
• working hours and holiday entitlement
• contractual benefits such as bonuses or allowances
• continuity of employment for statutory rights
• existing disciplinary or grievance histories

The aim of the regulations is to ensure that employees are not disadvantaged simply because the organisation responsible for employing them changes. Without TUPE protections, employees could otherwise face termination of employment or loss of contractual rights when businesses are sold or services change provider.

For employers, however, this automatic transfer principle can significantly affect the commercial structure of transactions. Incoming employers may inherit employment liabilities and contractual arrangements that differ from those within their existing workforce.

2. When Does TUPE Apply?

TUPE applies where there is a relevant transfer, which generally falls into one of two categories:

• a business transfer, or
• a service provision change.

Both types of transfer are common in modern business operations and outsourcing arrangements.

Business transfers

A business transfer occurs where an economic entity that retains its identity transfers from one employer to another. In practical terms, this means that the activities of a business or part of a business continue following the change of ownership.

Examples include:

• the sale of a business as a going concern
• the transfer of part of a business to another company
• mergers involving the transfer of identifiable business units.

The concept of an economic entity refers to an organised grouping of resources, such as employees, assets or management structures, which carries out an economic activity.

When that entity continues operating under new ownership, TUPE may apply and the employees assigned to it will normally transfer to the new employer.

Service provision changes

TUPE also applies in many outsourcing arrangements known as service provision changes (SPCs).

These arise where responsibility for delivering a particular service moves between organisations. Common examples include:

• outsourcing, where a business contracts an external provider to deliver services previously performed in-house
• retendering, where a contract for services moves from one contractor to another
• insourcing, where services previously provided by a contractor are brought back within the organisation.

For TUPE to apply in these circumstances, certain conditions must usually be satisfied. In particular, there must be an organised grouping of employees whose principal purpose is carrying out the activities on behalf of the client, and the activities carried out after the transfer must remain fundamentally the same as those performed before.

Service provision changes frequently arise in sectors such as facilities management, cleaning, catering, security services, IT support and professional services outsourcing.

3. When TUPE Does Not Apply

Although TUPE applies widely, not every change in business ownership or service arrangement will trigger the regulations.

One example is a share sale, where the ownership of a company changes but the legal employer remains the same. In this situation, employees remain employed by the same legal entity and TUPE will usually not apply.

Similarly, TUPE may not apply where:

• the activities carried out after the transfer are fundamentally different from those performed previously
• the arrangement concerns a single event or short-term task, rather than an ongoing service
• the business has entered certain forms of insolvency where the business is not continuing as a going concern, for example certain insolvent liquidation scenarios.

Determining whether TUPE applies can be legally complex, and employers frequently seek specialist legal advice before concluding that a proposed transaction falls outside the regulations.

Section Summary

TUPE applies where there is a relevant transfer, either through a business transfer (where an economic entity retains its identity) or a service provision change (where an organised grouping carries out activities that remain fundamentally the same after the change). Where the regulations apply, employees assigned to the transferring activity normally move automatically to the new employer with their employment rights preserved. Determining whether TUPE applies at an early stage is essential for managing legal risk and planning the transfer process effectively. For employee-focused guidance alongside employer compliance, see our TUPE Q&A for employees.

Section B: TUPE Process for Employers

Once it has been established that TUPE is likely to apply, employers must follow a structured process to ensure compliance with the regulations. Both the outgoing employer and the incoming employer have legal responsibilities before the transfer takes place, particularly in relation to workforce information and employee consultation.

For many organisations, TUPE transfers arise in the context of wider commercial transactions such as acquisitions, outsourcing projects or restructuring exercises. As a result, employment law considerations must be integrated into the transaction planning process alongside commercial and operational planning.

Employers that fail to manage the TUPE process correctly may face legal claims from employees or trade unions, particularly where employees are not informed or consulted properly. These claims can result in substantial financial liability, making early preparation essential.

1. TUPE Transfer Timeline

Although the TUPE Regulations do not prescribe a rigid timetable for transfers, the process typically follows a structured sequence of stages leading up to the transfer date.

The process usually begins once a proposed business transfer or service provision change has been identified. At this stage, the parties involved will assess whether TUPE is likely to apply and identify the employees who may be affected by the transfer.

Once the potential transfer has been confirmed, the employers involved must begin preparing for the statutory information and consultation process. This includes identifying appropriate employee representatives and preparing the information that must be disclosed to them.

The outgoing employer must also provide the incoming employer with employee liability information about the transferring workforce. This allows the incoming employer to understand the employment rights and potential liabilities associated with the employees who will transfer.

Immediately before the transfer date, both employers will normally finalise operational arrangements for the transfer of employees. This may include transferring payroll data, HR records and other relevant workforce information.

After the transfer takes place, the incoming employer assumes responsibility for managing the employees who have transferred and ensuring that their employment rights continue to be respected.

2. Informing and Consulting Employees

One of the most important obligations under TUPE is the duty to inform employee representatives about the transfer. In certain circumstances, employers must also consult with those representatives.

Employers must provide employee representatives with information about:

• the fact that the transfer is going to take place
• the proposed date of the transfer
• the reasons for the transfer
• the legal, economic and social implications of the transfer for employees
• any measures the employer envisages taking in relation to the affected employees.

Consultation is legally required where the employer envisages taking measures in relation to transferring employees. Measures may include operational changes such as alterations to working practices, changes to workplace location or potential restructuring after the transfer.

Employee representatives will normally be:

• a recognised trade union, where one exists, or
• elected employee representatives chosen specifically for the TUPE consultation process.

Employers must consult with representatives with a view to seeking agreement on the proposed measures. While agreement does not have to be reached, the consultation must be meaningful and take place before the transfer occurs.

In some smaller organisations, the law allows employers to consult employees directly rather than through representatives. This may apply where the organisation employs fewer than ten employees and there are no existing employee representatives.

Failure to inform and consult properly can expose employers to claims in the employment tribunal. A tribunal may award a protective award of up to 13 weeks’ actual pay per affected employee.

Employers managing wider workplace changes alongside a transfer should also consider the broader legal framework surrounding consultation and change within the workforce.

3. Employee Liability Information

The outgoing employer must provide the incoming employer with detailed information about the employees who are transferring. This is known as employee liability information (ELI).

Under the TUPE Regulations, this information must be provided not less than 28 days before the transfer date. The purpose of this requirement is to ensure that the incoming employer has sufficient time to understand the employment obligations they will inherit.

Employee liability information must include:

• the identity and age of transferring employees
• their employment terms and conditions
• details of any disciplinary action taken within the previous two years
• details of any grievances raised within the previous two years
• information about any legal action taken by employees against the employer
• details of any potential legal claims that the employer reasonably believes may arise.

Providing accurate employee liability information is an important part of the due diligence process in TUPE transfers. If the outgoing employer fails to provide the required information, or provides inaccurate information, the incoming employer may bring a claim for compensation.

Because this information includes personal data relating to employees, employers must also ensure that the disclosure complies with UK data protection rules. TUPE provides the lawful basis for sharing this information where it is necessary for the transfer.

Section Summary

The TUPE process requires employers to follow a structured sequence of steps before the transfer occurs. Employers must identify the transferring workforce, inform employee representatives about the proposed transfer and consult where measures are envisaged. The outgoing employer must also provide employee liability information to the incoming employer not less than 28 days before the transfer. Managing these obligations carefully helps reduce the risk of legal claims and ensures that employees are treated fairly throughout the transfer process.

Section C: Employee Rights Under TUPE

A central objective of the TUPE Regulations is to ensure that employees are protected when the business or service they work for transfers to a new employer. The law therefore preserves most of the employee’s existing contractual rights and prevents the transfer itself from being used as a reason to disadvantage employees.

When a relevant transfer takes place, the employees assigned to the transferring undertaking or service will normally transfer automatically to the incoming employer. Their employment continues as though it had always been with the new employer, meaning their existing contractual rights and employment history remain intact.

For employers, this automatic transfer principle can significantly affect workforce planning, as incoming organisations inherit not only employees but also most of the contractual obligations and employment liabilities associated with those employees.

1. Continuity of Employment

One of the key protections under TUPE is the preservation of continuity of employment.

Employees transferring under TUPE are treated as though their employment with the incoming employer began on the date they originally started working for the outgoing employer. In other words, their length of service is preserved despite the change of employer.

Continuity of employment is important because many statutory employment rights depend on an employee’s length of service. These include rights relating to statutory redundancy pay, protection from unfair dismissal and eligibility for certain family-related rights.

For example, an employee who has already accumulated several years of service with the outgoing employer will carry that service forward to the incoming employer following the transfer. The incoming employer must therefore take the employee’s full period of service into account when assessing statutory rights.

This continuity principle reinforces the fundamental aim of TUPE: ensuring that employees are not disadvantaged simply because their employment transfers as part of a business reorganisation or service provision change.

2. What Terms and Conditions Transfer

When employees transfer under TUPE, their existing contractual terms and conditions of employment usually transfer with them.

This means the incoming employer must honour most of the contractual arrangements that applied between the employee and the outgoing employer immediately before the transfer.

Examples of contractual rights that commonly transfer include:

• salary and pay arrangements
• contractual bonuses or commission schemes
• working hours and shift patterns
• holiday entitlement and other leave arrangements
• contractual sick pay
• workplace benefits such as allowances or company vehicles
• contractual notice periods.

In addition to contractual terms, the incoming employer may also inherit certain employment liabilities, such as unresolved grievances, disciplinary processes or potential legal claims relating to the employee’s employment before the transfer.

Where these matters arise after the transfer, the incoming employer will normally be responsible for addressing them in accordance with fair workplace procedures, such as a formal disciplinary procedure or grievance procedure.

However, not all employment rights transfer automatically. Certain occupational pension rights are treated differently under TUPE, although additional protections may still apply under separate pensions legislation.

Understanding which contractual rights transfer and which obligations the incoming employer may inherit is therefore a critical aspect of due diligence during any TUPE transaction.

3. Who Transfers Under TUPE

TUPE applies to employees who are assigned to the organised grouping of resources or employees that is transferring.

The key legal test is whether the employee is assigned to an organised grouping of employees whose principal purpose is carrying out the activities that are transferring to the new employer.

In practice, this means that employees whose roles are primarily connected with the transferring activity will usually move to the incoming employer.

Assignment is assessed on the facts of each case. Factors that may be considered include:

• the proportion of the employee’s working time spent on the transferring activities
• the employee’s role within the organisational structure
• the value of the work carried out for the transferring activity
• how the employee is managed within the business.

The assessment is not determined by any single factor and must be considered in the round.

Employees who may transfer under TUPE include:

Permanent employees

Employees on permanent contracts who are assigned to the transferring business or service will normally transfer automatically.

Fixed-term employees

Employees working under fixed-term contracts may also transfer under TUPE if they are assigned to the relevant undertaking or service.

Part-time employees

Part-time workers are equally protected by TUPE and will transfer on the same basis as full-time employees. Employers should also ensure that the rights of these employees are handled consistently with wider obligations relating to employment law for part-time workers.

Employees on statutory leave

Employees who are absent from work at the time of the transfer, such as those on maternity leave, paternity leave, parental leave or long-term sick leave, will normally transfer in the same way as employees who are actively working.

4. TUPE and Pensions

Pension rights are treated differently from most other contractual terms under TUPE.

In general, rights relating to old age, invalidity or survivors’ benefits under occupational pension schemes do not automatically transfer under the TUPE Regulations.

This means that the incoming employer is not usually required to replicate the exact pension scheme previously offered by the outgoing employer.

However, pension protections may still arise under separate legislation. In many cases, incoming employers must provide transferring employees with access to a pension arrangement that meets certain minimum standards, such as those required under automatic enrolment rules.

In addition, where employment contracts include specific promises about pension contributions or pension-related benefits, those contractual obligations may transfer to the incoming employer.

Because pension arrangements can be complex and financially significant, employers involved in TUPE transfers often seek specialist legal and pensions advice to understand their obligations fully.

Section Summary

Employees transferring under TUPE benefit from strong legal protections. Their employment transfers automatically to the incoming employer, continuity of service is preserved and most contractual terms and conditions continue unchanged. For incoming employers, this means inheriting both the workforce and most of the contractual rights and liabilities connected with those employees.

Section D: Changing Contracts & Redundancies After TUPE

One of the most challenging aspects of a TUPE transfer for employers concerns what changes can lawfully be made after the transfer takes place. Incoming employers often wish to restructure operations, integrate transferring employees into their existing workforce or align employment terms across the organisation.

However, the TUPE Regulations place strict limitations on when employers can change employment contracts or dismiss employees following a transfer. The legislation is designed to prevent employers from using a transfer as an opportunity to worsen employees’ contractual terms or remove employees whose roles have moved to the new organisation.

For this reason, employers must approach post-transfer workforce changes carefully. Any attempt to alter employment terms or dismiss employees for reasons connected with the transfer can expose the employer to claims for breach of contract or unfair dismissal.

These restrictions apply even where employers believe the proposed changes would bring operational efficiencies or align working arrangements with existing staff. The law focuses on the reason for the change, meaning employers must be able to demonstrate that any variation or dismissal is justified by a legitimate business reason.

1. Changing Terms After a TUPE Transfer

Under TUPE, the incoming employer generally takes on transferring employees on their existing contractual terms and conditions.

As a result, changes to those terms are usually restricted where the sole or principal reason for the variation is the transfer itself. If an employer attempts to change contractual terms for this reason, the change may be considered legally ineffective.

For example, an incoming employer would normally be prevented from reducing pay, removing contractual benefits or changing working hours simply because the employees have transferred from another organisation.

However, there are circumstances in which contractual changes may still be permitted.

A change may be lawful where:

• the reason for the change is entirely unrelated to the transfer
• the change is permitted under the existing employment contract, such as through a flexibility clause
• the change is made for an economic, technical or organisational (ETO) reason that involves changes in the workforce and the employee agrees to the change.

The ETO exception is one of the most important mechanisms through which employers may lawfully implement post-transfer changes. However, relying on this defence requires careful analysis, as the employer must show that the reason for the change relates to genuine operational needs and involves changes in the workforce, such as changes in employee numbers or job functions.

Because the rules surrounding contractual changes under TUPE are complex, employers often take legal advice before introducing significant changes to transferred employees’ contracts.

2. Harmonisation Risks

Following a TUPE transfer, incoming employers sometimes seek to harmonise the terms and conditions of transferring employees with those of their existing workforce.

For example, the employer may wish to standardise pay structures, working hours, benefits or holiday arrangements across the organisation.

However, harmonisation exercises are particularly risky under TUPE. Where the sole or principal reason for changing contractual terms is the transfer itself, the change will usually be unlawful even if employees agree to it.

Courts have consistently ruled that contractual changes made purely to harmonise terms following a transfer are generally invalid because they are directly connected with the transfer.

In practice, employers sometimes adopt longer-term workforce strategies rather than immediate harmonisation. This may involve waiting until legitimate organisational changes arise that justify contractual variation for reasons unrelated to the transfer.

3. TUPE Redundancies

TUPE also affects the circumstances in which employees can be dismissed following a transfer.

Where an employee is dismissed and the sole or principal reason for the dismissal is the transfer itself, the dismissal will normally be regarded as automatically unfair.

However, dismissals may still be lawful where they are made for a valid economic, technical or organisational (ETO) reason entailing changes in the workforce.

Examples of ETO reasons may include:

• a genuine reduction in the need for employees to carry out certain work
• restructuring that changes the functions employees perform
• operational changes that alter staffing requirements.

Even where an employer can rely on an ETO reason, the dismissal must still follow a fair redundancy or dismissal process. This includes consulting affected employees, applying objective selection criteria and considering suitable alternative employment where possible.

Employers managing workforce reductions should therefore ensure that the process aligns with broader redundancy law principles and guidance on redundancy and redundancy consultation.

Failure to follow a fair procedure can still result in a finding of unfair dismissal, even if the underlying business reason for the dismissal is legitimate.

4. Employees Who Refuse to Transfer

In some situations, employees may not wish to transfer to the incoming employer.

An employee who objects to transferring under TUPE may choose to formally object to the transfer. Where this occurs, their employment will normally terminate on the transfer date.

In most cases, this termination is not treated as a dismissal, meaning the employee will not normally be entitled to redundancy pay or compensation for unfair dismissal.

However, different considerations may arise where the transfer would involve substantial changes to the employee’s working conditions that are materially detrimental to them. In such circumstances, employees may have additional legal rights.

Employers should therefore handle objections carefully and ensure that employees are properly informed about the implications of refusing to transfer.

Section Summary

TUPE places significant restrictions on employers’ ability to change employment contracts or dismiss employees following a transfer. Contractual variations linked to the transfer itself are usually unlawful, and dismissals connected with the transfer are generally automatically unfair unless justified by an economic, technical or organisational reason involving workforce changes. Employers must therefore plan any post-transfer restructuring carefully to avoid legal risk.

Section E: TUPE Risks for Employers

TUPE transfers can create significant legal and operational risks for employers if they are not managed carefully. The automatic transfer of employees, together with the inheritance of employment liabilities, means that incoming employers may take on obligations that were created long before the transfer took place.

Equally, outgoing employers can face liability if they fail to comply with their statutory duties during the transfer process. This includes failures relating to employee consultation, disclosure of employee liability information or the handling of dismissals connected with the transfer.

Because TUPE issues frequently arise in commercial transactions such as mergers, acquisitions and outsourcing arrangements, employment risks must be considered alongside wider legal and financial due diligence. Employers that fail to assess TUPE implications early in the process may find themselves exposed to unexpected liabilities after the transfer takes place.

Understanding the principal risk areas under TUPE is therefore essential for both transferors and transferees.

1. Determining Whether TUPE Applies

One of the most significant risks for employers is incorrectly assuming that TUPE does not apply to a particular transaction or service change.

In some cases the application of TUPE will be obvious, such as where an entire business is sold as a going concern. In other situations, particularly involving outsourcing or contractor changes, the position may be less clear.

Disputes often arise where the parties disagree about whether there is an organised grouping of employees assigned to the transferring activities, or whether the activities carried out after the transfer remain fundamentally the same as those previously performed.

Where employers proceed on the basis that TUPE does not apply but a tribunal later determines that a relevant transfer did occur, this can result in significant legal consequences. Employees may claim that their employment should have transferred automatically and may bring claims relating to dismissal or failure to consult.

For this reason, employers frequently undertake detailed legal analysis at an early stage to determine whether TUPE is likely to apply.

2. Inheriting Employment Liabilities

Under TUPE, most employment rights and liabilities connected with transferring employees pass automatically to the incoming employer.

This means the new employer may inherit responsibility for issues that arose before the transfer took place. Examples may include:

• unresolved workplace complaints or employee disputes
• potential claims relating to discrimination or harassment
• unpaid wages, bonuses or holiday pay
• disputes concerning working time or contractual benefits.

Where these liabilities are not identified during due diligence, the incoming employer may find itself responsible for defending employment tribunal claims based on events that occurred under the previous employer.

For this reason, employment due diligence is a critical part of TUPE-related transactions. Incoming employers will often require detailed information about the workforce and potential employment claims before agreeing to proceed with the transfer.

3. Failure to Inform and Consult

Another common source of liability under TUPE arises from failures to comply with the statutory obligation to inform and consult employees.

Employers must provide employee representatives with information about the transfer and, where measures are proposed, must consult with them before the transfer takes place.

Where employers fail to meet these obligations, affected employees may bring claims in the employment tribunal. If the claim succeeds, the tribunal may award a protective award of up to 13 weeks’ actual pay for each affected employee.

Both the outgoing and incoming employers can be held responsible for these failures, depending on the circumstances of the case. For example, if the incoming employer fails to provide information about proposed measures, the outgoing employer may still face liability if that information is not passed on to employee representatives.

Employers involved in workforce restructuring should therefore ensure that consultation obligations are carefully coordinated between both parties to the transfer.

4. Changes to Employment Terms

Employers also face legal risk when attempting to change the terms and conditions of transferring employees.

As explained earlier, TUPE restricts contractual variations where the sole or principal reason for the change is the transfer itself. Employers that attempt to reduce pay, remove benefits or impose new working arrangements because of the transfer may find that those changes are legally ineffective.

Employees may also bring claims for breach of contract or constructive dismissal if the employer attempts to impose detrimental contractual changes following the transfer.

Employers should therefore approach any proposed contractual changes with caution and ensure there is a legitimate business reason that is not directly connected to the transfer.

5. TUPE and Data Protection

TUPE requires the outgoing employer to provide employee liability information to the incoming employer before the transfer takes place. This information includes personal data about transferring employees.

The disclosure of employee liability information is required by law under TUPE, which provides the lawful basis for processing this information under UK data protection legislation.

Nevertheless, employers must ensure that personal data relating to employees is handled responsibly. The outgoing employer should ensure that the information provided is accurate, limited to what is necessary for the transfer and shared securely with the incoming employer.

Employers sometimes enter into confidentiality or data-sharing agreements as part of the transaction process to ensure that employee data is handled appropriately.

6. TUPE and Pensions

As discussed earlier, rights relating to old age, invalidity or survivors’ benefits under occupational pension schemes are generally excluded from the automatic transfer provisions of TUPE.

However, incoming employers may still have obligations to provide transferring employees with access to a pension scheme that meets minimum statutory standards. In addition, contractual promises relating to pension contributions may transfer to the new employer.

Because pension arrangements can involve significant financial commitments, both incoming and outgoing employers typically review pension obligations carefully during the due diligence process.

7. TUPE and Insolvency

TUPE can apply differently where the outgoing employer is insolvent.

Where a business is transferred during administration or certain other rescue procedures, TUPE may still apply but with some modifications. In these circumstances, some employment liabilities may not transfer in the usual way and certain employee debts may instead be payable through statutory compensation mechanisms.

In contrast, where a company enters insolvent liquidation and the business does not continue operating, TUPE may not apply because there is no ongoing economic entity capable of transferring to another employer.

Because the interaction between TUPE and insolvency law can be complex, specialist legal advice is usually required where a transfer occurs in the context of financial distress.

Section Summary

TUPE transfers present a range of legal risks for employers, including disputes over whether TUPE applies, the transfer of employment liabilities, failures to consult employees and unlawful changes to employment contracts. Early legal analysis, careful due diligence and structured communication with employees are essential to managing these risks effectively.

Section F: TUPE Checklist for Employers

Managing a TUPE transfer successfully requires careful preparation, legal awareness and clear communication with employees. Whether an organisation is transferring staff to another employer or taking on employees as part of a business acquisition or outsourcing arrangement, employers must follow a structured approach to minimise legal risk.

A failure to prepare for TUPE obligations can result in significant financial exposure, including claims for unfair dismissal, breach of contract or failure to inform and consult employees. For this reason, businesses involved in transfers typically conduct employment due diligence and plan the transfer process well in advance of the transfer date.

The following checklist highlights key steps employers should consider when preparing for a TUPE transfer.

1. Assess Whether TUPE Applies

Before proceeding with a business transaction or service change, employers should assess whether the TUPE Regulations are likely to apply.

This involves determining whether there is a relevant transfer, such as the transfer of an economic entity that retains its identity or a service provision change involving an organised grouping of employees.

Where the application of TUPE is uncertain, employers often seek specialist legal advice to assess the risk and ensure that appropriate arrangements are put in place.

2. Identify the Transferring Workforce

Once TUPE is likely to apply, the employer must identify which employees are assigned to the transferring undertaking or service.

This typically involves analysing the roles employees perform, the proportion of time they spend on the transferring activity and the organisational structure of the business.

Correctly identifying the transferring workforce is important because those employees will normally transfer automatically to the incoming employer on their existing terms and conditions.

3. Conduct Employment Due Diligence

Incoming employers will usually carry out employment due diligence before completing a transaction involving TUPE.

This process allows the incoming employer to understand the employment liabilities they may inherit. Areas typically reviewed include:

• employment contracts and terms of employment
• workforce structure and salary costs
• ongoing disciplinary or grievance issues
• potential employment tribunal claims
• collective agreements or union arrangements.

Due diligence enables the incoming employer to evaluate risks and negotiate contractual protections where necessary, such as indemnities between the parties.

4. Provide Employee Liability Information

The outgoing employer must provide employee liability information (ELI) to the incoming employer.

This information must be provided not less than 28 days before the transfer and must include key details about transferring employees, such as their identity, employment terms and any disciplinary or grievance records.

Providing accurate and complete employee liability information is important because failure to do so can result in claims for compensation.

5. Inform and Consult Employees

Employers must inform employee representatives about the proposed transfer and consult with them if any measures affecting employees are planned.

The information provided to representatives must include:

• confirmation that the transfer will take place
• the date or proposed date of the transfer
• the reasons for the transfer
• the legal, economic and social implications for employees
• any measures that the employer envisages taking in relation to the workforce.

Where consultation is required, employers must engage with representatives with a view to reaching agreement on the proposed measures.

Failure to inform and consult employees properly can result in significant tribunal awards.

6. Plan Post-Transfer Integration

Incoming employers should consider how transferring employees will be integrated into the organisation after the transfer.

This may involve reviewing reporting structures, workplace policies and operational processes. However, employers must ensure that any changes to employees’ contractual terms are consistent with the restrictions imposed by TUPE.

Careful planning can help ensure a smooth transition for employees and reduce disruption to the business.

7. Seek Specialist Advice Where Needed

TUPE transfers often involve complex legal issues, particularly where large numbers of employees are affected or where the transfer forms part of a wider commercial transaction.

Employers frequently seek advice from employment lawyers or HR specialists to ensure that their obligations are met and that risks are managed effectively throughout the process.

Section Summary

A structured approach to TUPE transfers helps employers minimise legal risk and maintain workforce stability during organisational change. By assessing whether TUPE applies, identifying the transferring workforce, conducting due diligence and consulting employees appropriately, employers can navigate the transfer process more effectively.

FAQs

What does TUPE stand for?

TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations 2006. These regulations protect employees when a business or service they work for transfers to a new employer.

When does TUPE apply?

TUPE applies when there is a relevant transfer, such as the sale of a business or a service provision change involving outsourcing, insourcing or contractor changes where an organised grouping of employees carries out the activities.

Does TUPE apply to outsourcing?

Yes. TUPE commonly applies to outsourcing arrangements where a business transfers a service previously carried out internally to an external provider. It may also apply when the service later transfers to a new contractor or returns to the original organisation.

Can employees refuse to transfer under TUPE?

Employees can object to transferring to the incoming employer. If they do so, their employment will normally terminate on the transfer date and they will usually not be entitled to redundancy pay.

Can an employer change terms after TUPE?

Changes to employment contracts are generally restricted where the reason for the change is the transfer itself. Employers may only make certain changes where there is a valid business reason unrelated to the transfer or where an economic, technical or organisational reason applies.

Are redundancies allowed after TUPE?

Redundancies may be lawful after a TUPE transfer if they are made for a valid economic, technical or organisational reason involving changes in the workforce. However, dismissals connected solely with the transfer are usually automatically unfair.

What happens to pensions under TUPE?

Occupational pension rights relating to old age, invalidity or survivors’ benefits do not normally transfer automatically under TUPE, although incoming employers may still need to provide access to a pension arrangement that meets minimum statutory requirements.

Conclusion

The TUPE Regulations play a crucial role in protecting employees when businesses change hands or services are transferred between organisations. By preserving employment rights and ensuring continuity of employment, TUPE helps provide stability for employees during periods of organisational change.

For employers, however, TUPE introduces significant legal responsibilities. Businesses must assess whether the regulations apply, identify the employees affected, inform and consult representatives appropriately and carefully manage any post-transfer workforce changes.

Failure to comply with TUPE can lead to employment tribunal claims, financial penalties and operational disruption. Employers involved in business transfers or outsourcing arrangements should therefore ensure that TUPE considerations are addressed early in the process and managed with appropriate legal and HR expertise.

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