The Transfer of Undertakings (Protection of Employment) Regulations, generally known as TUPE, protect employees when the business or organisation they work for changes ownership, or when a contracted-out service moves to a new provider. GOV.UK confirms TUPE applies across Great Britain, whatever the size of the employer, provided the part of the business transferring operates in the UK; Northern Ireland has its own equivalent regulations.
What TUPE actually protects
GOV.UK says that when TUPE applies, employees’ jobs usually transfer to the new employer, except where the transfer involves redundancy or the old employer’s insolvency. Their employment terms and conditions transfer with them, and their continuity of employment is preserved, so accrued rights that depend on length of service, such as redundancy entitlement, are not reset by the transfer. The new employer effectively steps into the old employer’s shoes as far as those employees’ contracts are concerned.
The two situations TUPE covers
GOV.UK identifies two scenarios. The first is a business transfer, where a business or part of a business moves from one employer to another, including through a merger. The second is a service provision change, where an in-house service such as cleaning, catering or IT support is outsourced to a contractor for the first time, brought back in-house, or moved from one contractor to another when a contract changes hands. Both situations trigger the same core protections for the affected employees, even though the underlying transaction looks very different in each case.
The duty to inform and consult
Before a relevant transfer, an employer must inform and consult affected employees. GOV.UK says that where a recognised trade union is in place, the employer consults through union representatives; where there is no union, the employer consults other elected employee representatives. Employers must tell representatives that the transfer is happening, when and why, how it will affect employees, whether there will be any reorganisation, and how many agency workers are being used and in what roles. Employers must also consult employee representatives about anything connected with the transfer that would affect employees, such as a proposed reorganisation, and try to reach agreement with them. GOV.UK states that employers can be penalised if they fail to carry out this consultation properly.
Direct consultation for smaller employers
Smaller employers can consult employees directly rather than through elected representatives. GOV.UK explains that this threshold changed on 1 July 2024: before that date, only employers with fewer than 10 employees could inform and consult directly. Since 1 July 2024, an employer can consult directly with the employees affected if either the employer has fewer than 50 employees in total, or the transfer itself involves fewer than 10 employees, whichever situation applies, without needing to run an election for representatives. This gives many smaller and mid-sized employers a simpler route to comply with the consultation duty, provided the substance of the information given and the consultation still takes place.
What TUPE does not do
TUPE preserves existing terms; it does not freeze them forever or prevent all change. A new employer can still agree changes to terms with employees or their representatives after a transfer in the same way any employer can, provided any change is not made solely because of the transfer itself without a valid economic, technical or organisational reason entailing changes in the workforce. Dismissals connected with the transfer are also subject to specific protection, and an employee who is dismissed for a reason connected with the transfer, without such a reason, may be able to bring an unfair dismissal claim.
Getting help with a transfer
GOV.UK recommends that an employee unsure how a transfer affects them, or an employer unsure how to run the consultation, contacts Acas, Citizens Advice, or in the case of an employee, their trade union representative. Because consultation failures can lead to financial penalties against the employer and because continuity of employment questions can affect later redundancy or unfair dismissal claims, getting the process right, or getting early advice where it goes wrong, matters on both sides of a transfer.
FAQs
Does TUPE apply to outsourcing a service, not just selling a business?
Yes. GOV.UK treats a service provision change, such as outsourcing cleaning or IT support, as a second category of transfer covered by TUPE, alongside a traditional business transfer.
Can a new employer change staff terms straight after a TUPE transfer?
Changes are restricted where they are made solely because of the transfer and there is no valid economic, technical or organisational reason entailing changes in the workforce.
What changed for small employers in 2024?
From 1 July 2024, direct consultation with employees, instead of through elected representatives, became available to employers with fewer than 50 employees, or where fewer than 10 employees are transferring, widening on the previous under-10-employee threshold.
What happens if an employer does not consult properly?
GOV.UK states that employers can be penalised for failing to inform and consult as TUPE requires.
Bottom line
TUPE protects employees’ jobs, terms and continuity of service when a business or a contracted-out service transfers to a new employer in Great Britain, and requires the employer to inform and consult employee representatives, or employees directly where the 2024 thresholds allow it, before the transfer takes place. This article is general information, not legal advice on a specific transfer; Acas or an employment solicitor can advise on individual circumstances.