Question

What is TUPE and what happens when your employer is taken over?

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Answer

TUPE — the Transfer of Undertakings (Protection of Employment) Regulations — protects employees when the business they work for changes hands. Its central effect is that your employment transfers automatically to the new employer on your existing terms, with your continuity of service preserved.

When it applies:

A business transfer — a company, or part of one, is sold as a going concern.

A service provision change — this is the one people miss. It covers outsourcing a service to a contractor, bringing it back in-house, and changing from one contractor to another. Cleaning, catering, IT support and facilities staff are frequently covered when a contract changes hands.

It does not apply to a pure share sale, where the employer is legally the same company, or generally to the sale of assets alone.

What transfers with you:

Your contract, substantially unchanged, including pay, hours, holiday and contractual benefits.

Continuity of service, so length of service for redundancy and unfair dismissal purposes is unbroken.

Existing liabilities, including outstanding claims — the new employer inherits them.

Recognition of a trade union in some circumstances.

Pensions are the main exception. Occupational pension rights relating to old age and survivors do not transfer in the same way, though the new employer must provide a minimum level of pension provision.

Protections against change:

Dismissal is automatically unfair if the sole or principal reason is the transfer, unless there is an economic, technical or organisational (ETO) reason entailing changes in the workforce.

Changes to terms for a transfer-related reason are generally void — even if you agree to them, which surprises employers attempting to harmonise terms after acquisition.

Information and consultation with representatives is required before the transfer, with penalties for failure.

You can object to transferring, but doing so generally terminates your employment without redundancy rights.

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