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Learn what a TUPE transfer means and how to manage it correctly. Our practical guide covers the TUPE process, consultation requirements, employee rights, redundancy rules, and your obligations as an employer.
Written by:Â Damian Phillips, Employment Law Partner, Darwin Gray | Last updated: 20/04/2026 | Reviewed by: Damian Phillips
When a business changes hands or a service contract moves to a new provider, what happens to the people who work there? That’s the question TUPE answers.
TUPE, the Transfer of Undertakings (Protection of Employment) Regulations 2006, protects employees when their employer changes. It ensures that staff transfer to the new employer on their existing terms and conditions, with their continuous service preserved. The new employer can’t simply start afresh with new contracts or cherry-pick which employees they want.
For employers, the TUPE regulations create obligations on both sides of a transfer. The outgoing employer must provide information about transferring employees and consult with their employee representatives about the change. The incoming employer inherits not just the employees but all the liabilities that come with them, including any outstanding employment tribunal claims.
Getting TUPE wrong is expensive. Fail to consult properly, and you could face compensation claims of up to 13 weeks’ pay per affected employee. Dismiss someone because of the transfer, and it’s automatically unfair. Change someone’s terms without a valid reason, and the change is void.
This guide explains what TUPE means, when it applies, and what you need to do to get it right.
TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations 2006. These regulations protect employees when the business or service they work for transfers to a new employer.
The core principle is simple: employees shouldn’t lose their jobs or rights just because their employer changes. When TUPE applies:
TUPE applies to employers of all sizes, in both the public and private sectors.
TUPE applies to two types of transfer: a “business transfer” and a “service provision change”.
A business transfer occurs when a business, or part of a business, transfers from one employer to another and retains its identity after the transfer. This typically happens when:
For TUPE to apply, there must be a transfer of an “economic entity” that retains its identity. An economic entity is an organised grouping of resources (people, assets, or both) that has the objective of pursuing an economic activity.
Simply buying assets (like equipment or stock) without taking on the business as a going concern won’t trigger the TUPE regulations. But if you’re taking over something that continues to operate as a business, TUPE is likely to apply.
A service provision change occurs when:
For TUPE to apply to a service provision change, there must be an “organised grouping of employees” whose principal purpose is carrying out the activities in question. The activities must be essentially the same before and after the change, and the client must remain the same.
Example: A company outsources its cleaning to CleanCo. When the contract ends, they award it to SparkleClean instead. The cleaners who work on that contract will transfer from CleanCo to SparkleClean under TUPE.
TUPE doesn’t apply to:
If you’re unsure whether TUPE applies to your situation, it’s worth getting legal advice. The consequences of getting it wrong can be significant.
When TUPE applies, the following transfer automatically to the new employer:
All employees “assigned” to the transferring business or service transfer to the new employer. An employee is assigned if they spend the majority of their time working in the part that’s transferring.
Employees transfer on their existing terms and conditions of employment. This includes:
The new employer can’t unilaterally change the terms of a transferring employee’s employment contract just because there’s been a transfer.
Employees’ continuous service transfers with them. This matters for calculating statutory redundancy pay, qualifying periods for employment rights, and contractual benefits linked to length of service.
The new employer inherits all liabilities connected to the transferring employees under the TUPE regulations, including:
This is why thorough due diligence matters. You need to know what you’re taking on.
Any collective agreements in place continue to apply to the transferred employees.
Occupational pension rights are treated differently. Most rights under occupational pension schemes are excluded from the TUPE regulations, although there are still some protections under pension legislation instead. While the new employer must provide access to a pension scheme, they don’t have to match the previous employer’s pension arrangements (although they must meet certain minimum requirements for defined contribution schemes).
The outgoing employer must provide the incoming employer with written information about the employees who will transfer. This is called Employee Liability Information (ELI).
ELI must be provided at least 28 days before the transfer. In practice, providing it earlier helps the incoming employer plan properly.
If the outgoing employer fails to provide ELI, or provides inaccurate information, the incoming employer can bring a tribunal claim under the TUPE regulations. The tribunal can award compensation of at least £500 per employee, with no maximum limit. The award will take into account any loss the incoming employer has suffered as a result.
Both the outgoing and incoming employer have duties to inform and consult affected employees (or their trade union or employee representatives) before the transfer.
You must inform and consult the representatives of:
If there’s a recognised trade union, you consult with union representatives. If not, you must consult with elected employee representatives or any existing employee workforce council.
For businesses with fewer than 50 employees, and for transfers involving fewer than 10 employees, you can consult directly with employees instead of trade union or employee representatives.
In other cases, the duty to consult with employee representatives or the trade union is mandatory, and you can’t opt to consult individually instead.
Both employers must provide information about:
“Measures” means any changes to working arrangements. This could include changes to reporting lines, work location, working hours, or potential redundancies.
Consultation is only required if the employer envisages taking “measures” that will affect employees. If there are no planned changes, you still need to inform trade union or employee representatives, but you don’t need to consult.
Consultation must be “with a view to seeking agreement” on the proposed measures. This means genuinely considering employee input, not just going through the motions.
There’s no minimum consultation period, but information and consultation must happen “long enough before” the transfer to be meaningful. For larger or more complex transfers, this could mean several weeks.
If an employer fails to inform or consult with employee representatives properly, affected employees can bring a tribunal claim. The tribunal can award up to 13 weeks’ uncapped gross pay per affected employee.
Both the outgoing and incoming employer can be held jointly and severally liable. This means employees can claim against either or both employers, regardless of which one was at fault.
Before the transfer:
On the transfer date:
Before the transfer:
After the transfer:
One of the most significant aspects of TUPE is the restriction on changing employees’ terms and conditions.
Any variation to an employee’s contract is void if the sole or principal reason for the change is the transfer itself, or a reason connected with the transfer that is not an ETO reason.
This applies even if the employee agrees to the change. You can’t get around TUPE by asking employees to sign new contracts.
Changes to terms and conditions are permitted if:
An ETO reason must involve changes in the workforce, meaning changes to the number of employees or their job functions. Examples include:
Simply wanting to harmonise terms with your existing workforce is not an ETO reason. Neither is wanting to reduce costs without actual changes to the workforce.
Many employers want to bring transferred employees onto the same terms as their existing staff. This is understandable, but TUPE makes it difficult.
Harmonisation is only lawful if there’s a genuine ETO reason, or if enough time has passed that the transfer can no longer be said to be the reason for the change (though there’s no fixed timeframe for this).
The safest approach is to keep transferred employees on their existing terms and only offer changes to terms that benefit them.
Redundancy is one of the most complex areas of TUPE. The rules are strict, and getting them wrong can mean automatic unfair dismissal.
When TUPE applies, the outgoing employer cannot make employees redundant just before the sale simply to reduce the workforce for the new employer or to make the business more attractive to buyers. Any such dismissals would be automatically unfair.
However, redundancies before a transfer may be lawful if:
Even if the outgoing employer makes redundancies, the liability for any unfair dismissal claims transfers to the incoming employer.
The incoming employer can make redundancies after the transfer, but only if:
Simply wanting fewer employees, or wanting to reduce costs, isn’t enough. There must be a genuine change in the workforce.
Examples that may qualify:
Examples that won’t qualify:
Even with a valid ETO reason, you must still follow a fair redundancy process:
Transferred employees must be treated the same as existing employees. You can’t select someone for redundancy just because they transferred under TUPE.
Yes, employees can object to transferring to the new employer. But this isn’t a straightforward right to take redundancy instead.
If an employee objects to the transfer:
Because there’s no dismissal, the employee can’t claim unfair dismissal or redundancy pay (unless there are other circumstances that amount to a dismissal).
If the transfer involves a significant detrimental change to working conditions (for example, a major change in location), the employee may be able to treat themselves as constructively dismissed and bring an unfair dismissal claim.
Employees sometimes ask to take redundancy instead of transferring. There’s no automatic right to this. However, some employers negotiate exit packages with employees who don’t want to transfer, particularly in larger transactions.
Occupational pension rights are treated differently under TUPE. The new employer doesn’t have to replicate the previous employer’s pension scheme, but they must provide minimum pension provisions.
For employees who were members of an occupational pension scheme with employer contributions, the new employer must either:
The new employer doesn’t have to provide a defined benefit (final salary) pension. However, they must provide the minimum defined contribution arrangements described above.
This can be a significant issue in transfers from the public sector, where defined benefit pensions are common, to the private sector.
The Employment Rights Act 2025 includes provisions to address “two-tier workforces” in public sector outsourcing to the private sector, which may affect pension requirements. Detailed regulations are expected in 2026.
Special rules apply when the transferring employer is insolvent.
These rules make it easier for buyers to rescue failing businesses without inheriting all the legacy liabilities. However, the rules are complex and specific legal advice is essential.
The consequences of getting this wrong are significant. If in doubt, assume TUPE applies and take advice.
Failing to inform and consult properly is one of the most common TUPE failures. The 13 weeks’ pay penalty per employee can add up quickly.
Employee Liability Information must be provided at least 28 days before the transfer. Late or incomplete ELI creates liability for the outgoing employer.
Rushing to harmonise transferred employees onto your standard terms is tempting but dangerous. Changes connected to the transfer are void, even if employees agree.
Making redundancies to prepare a business for sale, or at the incoming employer’s request, will usually be automatically unfair.
Document everything: what information was provided, when, to whom, and what was discussed in consultation. You may need to prove you complied.
A TUPE transfer is when employees automatically move from one employer to another because the business or service they work for has transferred. Their employment continues as if their contract had originally been made with the new employer.
Yes, you can object to transferring, but this isn’t the same as taking redundancy. If you object, your employment ends on the transfer date. You won’t be employed by either the old or new employer, and you won’t normally be entitled to redundancy pay or able to claim unfair dismissal.
Your main rights are: to transfer to the new employer on your existing terms and conditions; to have your continuous service preserved; to be informed and consulted about the transfer; and protection from dismissal or detrimental changes connected to the transfer.
Yes, but only if there’s a genuine redundancy situation and an Economic, Technical or Organisational (ETO) reason involving changes in the workforce. You must be treated the same as employees who were already working for the new employer.
Not if the reason for the change is the transfer itself. Changes are only permitted if they’re unrelated to the transfer, or if there’s a valid ETO reason. Even beneficial changes should be approached with caution.
There’s no time limit. TUPE protection continues for as long as the transfer can be said to be the reason for any dismissal or detrimental change. In practice, this means at least a year, and potentially much longer.
Your occupational pension doesn’t transfer automatically. The new employer must provide a minimum pension arrangement, but it doesn’t have to match your previous scheme.
Both the outgoing and incoming employer can be jointly and severally liable for failures to inform and consult. For other breaches, liability depends on who was responsible, though liabilities generally transfer to the incoming employer.
| Term | Definition |
|---|---|
| Assigned | An employee is assigned to the transferring part of a business if they spend the majority of their working time there. |
| ELI (Employee Liability Information) | The written information about transferring employees that the outgoing employer must provide to the incoming employer. |
| ETO reason | An Economic, Technical, or Organisational reason entailing changes in the workforce. Required to justify dismissals or contract changes connected to a transfer. |
| Measures | Any changes the employer envisages taking in connection with the transfer. Consultation is required if measures are planned. |
| Organised grouping of employees | A group of employees whose principal purpose is carrying out the activities being transferred. Required for TUPE to apply to service provision changes. |
| Service provision change | When a service is outsourced, insourced, or transferred to a new contractor. |
| Transferee | The incoming employer (the one receiving the transferred employees). |
| Transferor | The outgoing employer (the one whose employees are transferring away). |
TUPE transactions are high-stakes. The penalties for non-compliance are significant, and the rules are complex. We help employers on both sides of a transfer get it right.
We’re direct, responsive, and focused on practical solutions. You’ll work with the solicitor handling your matter from the start. And as Wales’ leading Welsh language law firm, we can provide all our services in Welsh or English.
Planning a transaction or facing a TUPE transfer? Contact us for a free, no-obligation chat about how we can help.
To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.
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