TUPE
When you acquire a company or win a service contract, you do not just acquire the assets—you inherit the workforce (TUPE). Under the law, the new employer automatically steps into the shoes of the old one, taking on all existing staff, their contract terms, and even their historic grievances.
TUPE
Business Transfers & Outsourcing
The Transfer of Undertakings (Protection of Employment) regulations preserve employees’ terms and conditions when a business or contract is transferred to a new employer.
It applies not just when buying a business, but also during “Service Provision Changes”—such as outsourcing cleaning, IT, or changing security contractors.
The "Hidden" Risk
Failing to inform and consult correctly isn’t just a procedural error. It can result in a “Protective Award” of up to 13 weeks’ gross pay per employee, regardless of financial loss.
Critical Deadlines
Liability & Timing
The new employer (Transferee) inherits almost all liabilities from the old employer (Transferor). Timing is everything.
13 Weeks' Pay
The maximum “Protective Award” penalty per employee for failure to consult. This is punitive, not compensatory.
2 Years
Qualifying period for unfair dismissal still applies, but TUPE preserves their continuous service start date.
28 Days
Employee Liability Information (ELI) must be given to the new employer at least 28 days before the transfer.
Unlimited
Unfair Dismissal awards are uncapped if the sole reason for dismissal is the transfer itself (automatically unfair).
The Process
10 Points to Bear in Mind
TUPE is strict. Whether you are the incoming or outgoing employer, these rules cannot be contracted out of.
1.
Identify the Transfer: Does TUPE apply? It covers business sales and “Service Provision Changes” (outsourcing, insourcing, or re-tendering).
2.
Who Transfers? Employees “assigned” to the organised grouping of resources or resources subject to the transfer will move automatically.
3.
Consultation: You must inform (and often consult) with elected employee representatives long before the transfer happens.
4.
No Harmonisation: The new employer cannot simply change contracts to match their existing staff. Changes due to the transfer are void.
5.
Objecting: Employees can object to the transfer, but this usually results in their resignation, not a redundancy payment.
6.
ETO Reasons: You can only dismiss or change terms for “Economic, Technical, or Organisational” reasons entailing changes in the workforce.
7.
Measures Letter: The new employer must write to the old employer stating any “measures” (changes) they envisage taking post-transfer.
8.
ELI Data: The outgoing employer must provide specific “Employee Liability Information” (ages, disciplinary records, grievances) 28 days prior.
9.
Large Scale: If more than 20 people are involved, special consultation rules apply. If closing down, you must consult on both the closure AND the redundancies.
10.
Pensions: Generally, old age pension rights do not transfer, but early retirement rights and auto-enrolment obligations do.
Get Expert Help
Navigating a Transfer?
TUPE is one of the most complex areas of employment law. Whether you are bidding for a contract or selling your business, get the due diligence right.
Recommended Further Information
Whether outsourcing or acquiring, our TUPE expertise protects employers in Finchley, London, and the Home Counties from severe protective awards.