TUPE - What's next?

The Transfer of Undertakings (Protection of Employment) Regulations (commonly shortened to "TUPE") aim

to protect employees who work in a business, or part of a business, which is transferred. All rights and

obligations transfer (including trade union recognition) except criminal liabilities and occupational pension

schemes. However, employees who were members of an occupational pension scheme before a TUPE

transfer are entitled to join a scheme or be eligible to join a scheme provided by the new employer.

Dismissal is unfair if the reason for it is the transfer, unless there is an "economic, technical or organisational

reason" ("ETO") for the dismissal (for example, redundancy). Changing terms and conditions are only lawful

if the changes are unrelated to the transfer or if there is an "ETO" reason. Special rules apply if the transferor

is insolvent.

The vendor or outgoing contractor is required to provide "employee liability information" to the purchaser or

incoming contractor.

Two types of transfer are covered under TUPE: a "business transfer" and a "service provision change"


• A business transfer occurs when a business or trade (or part of it) situated in the UK immediately

before the transfer moves to a new owner. This includes the sale of all or part of a business, it also

includes mergers or a change of licensee, franchisee or a concession. TUPE only applies where the

business (or part of it) retains its identity after the transfer has taken place.

• A service provision change would be where contracted out services are transferred to a new

contractor OR when a service provided by an employee/s is then outsourced to a contractor, or

where external services (provided by a contractor) are brought back in-house. In a service provision

change, there is no requirement for the entity to retain its identity after the transfer.