UK: TUPE Or Not TUPE? Key Issues For Businesses

Last Updated: 20 March 2008
Article by Barbara Stewart

The TUPE Regulations (Transfer of Undertakings (Protection of Employment) Regulations) were brought in to protect employees of any business which changes hands and where the services provided by employees of one employer are transferred to another employer. We take a look at the key implications of TUPE such as when does TUPE apply?, provision of employee liability information, informing and consulting with staff, changes to terms and conditions, dismissals and other obligations for employers.

More often than not, there will be employment law aspects to any business reorganisation.   Employees have long been protected from dismissal or detriment where there is a transfer of business or services from one organisation to another.  The protection stems from the Transfer of Undertakings (Protection of Employment)
Regulations 2006 ("the Regulations").

When does TUPE apply?

A "Relevant Transfer" to which the Regulations apply includes "Business Transfers" (transfer of an economic entity, situated in the UK, that retains its identity after the transfer).  The definition also includes "Service Provision Changes" (e.g. contracting out, re-tendering or bringing services back "in- house"). 

On purchasing a business or upon providing new services, the new proprietor or service provider ("the Transferee") automatically takes over the contracts of employment of all those employed immediately before the transfer.  The transferee also takes over liability to employees stemming from employment related events which occurred before the transfer, e.g. liability, for unfair dismissal.

Provision of employee liability information

The Regulations contain an obligation on transferors to provide certain information to the transferee prior to the transfer regarding the employees who will transfer. This mainly relates to the identity and age of employees, written particulars of employment, details of any collective agreements, disciplinary proceedings, grievances and details of any claims brought by the employees, as well as claims that the transferor might reasonably believe that any employee may bring.

The Regulations prescribe how and when the employee liability information must be given.  Employers should be aware that Employment Tribunals will interpret these provisions narrowly and businesses cannot simply hide behind the banner of "commercial sensitivity". 

Where the transferor fails to provide this information or where such information is defective, the transferee can present a complaint to the Employment Tribunal within 3 months of the transfer.  The compensation is set at a minimum of Ł500 for each employee unless it would be unjust or inequitable to award this minimum payment. 

Changes to terms and conditions of employment

The Regulations specify that changes to an employee's terms for a reason connected to the transfer are void unless the sole or principal reason for the change is an economic, technical or organisational reason entailing changes in the workforce (an ETO reason).

However, there is still very limited scope to allow either a transferee or transferor to vary an employee's terms and conditions of employment.  The new Regulations do not permit the transferring employer to make changes simply to harmonise the terms and conditions of the transferred workers to those already in place for the transferee's existing staff.  It is still a matter of "why are the changes being" made rather than "when". There is no specific period of time following the transfer after which it is safe to assume that the transfer did not impact, either directly or indirectly, on the decision to make the changes. 

Furthermore, it does not matter that an employee agrees to the changes, they will still be void if they were made for a reason connected to the transfer, unless the change is for the benefit, not the detriment, of the employee.  Essentially, employees can 'cherry pick'  what changes suit them best.


Dismissals where the sole or principal reason is not the transfer itself but is a reason connected with it and there is an ETO reason are potentially fair dismissals.  There is still a duty on employers to act reasonably and comply with the other requirements of the general law on unfair dismissal.  It is a difficult hurdle to cross to establish an ETO reason for dismissals relating to the transfer.

Peculiarly, where there is a TUPE transfer, liability for related unfair dismissal automatically passes to the transferee. This is why it is important to have properly drafted contracts for business sale/purchase and contracting out etc of services.  If the transferor has indemnified the transferee against that liability, it is the transferor who will ultimately bear the cost under the terms of the agreement, even though it has no liability to the dismissed employee under the Regulations.   In absence of these indemnities, the transferee will be on the hook for dismissals which took place prior to the transfer.  Furthermore, an employee dismissed by the transferor a short while before the transfer will be deemed for TUPE purposes to have been an employee immediately before the transfer, if the dismissal was for a reason connected with the transfer.

Obligations to inform and consult affected employees

Those employees affected by the transfer must be given certain information regarding the proposed transfer, e.g., the social, legal and economic implications of the transfer and there must be consultation with these affected employees.  The information and consultation process must be conducted in a particular way and employee representatives should be elected.  The transferor and transferee can be jointly and severally liable for failure to inform and consult with employees who are affected by the TUPE transfer.  It will be a matter for the Tribunal to apportion compensation between the two parties and an award of up to 13 weeks' pay per employee can be made.  Obvious difficulties remain depending on the financial viability of the transferor and transferee.

Insolvent businesses

There is now a more relaxed approach to the application of the Regulations in certain insolvency situations with a view to allowing businesses to continue which should at least protect some jobs rather than none.

The Regulations ensure that some of the transferor's pre-existing debts to employees do not pass to the transferees, for example, statutory redundancy pay, pay in lieu of notice and holiday pay. 

There are also greater powers to vary terms and conditions of employment where the variation is made with the intention of safeguarding the employment opportunities by ensuring the survival of the business post transfer.  The Regulations prescribe a specific procedure for agreeing such changes.  This must be followed in order for the changes to be valid.

Buyers and sellers beware

Claims for breaches of the Regulations can be brought not only by employees, but also by workers, trade union officials, employee representatives and the transferee employer.  Employers should remember that the common law of constructive dismissal still operates in tandem with the Regulations.  TUPE is, in short, a minefield.  Courts will always be minded to interpret the Regulations in favour of the employee to ensure that the 'P' ("Protection") is kept in TUPE.

If you have any questions about how TUPE may affect your business, please contact us.  We'll be happy to help.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.