The Complete TUPE Guide: Meaning, Process & Legal Advice UK

TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations, a key UK employment law rule designed to preserve employees’ rights when a business or service contract is transferred to a new employer. In practical terms, TUPE means that when a business (or part of one) changes hands, the staff automatically move to the new owner on their existing terms and with continuous service. Under TUPE, employees’ jobs, pay, holiday entitlement, and other contract terms “transfer” to the new employer, who steps into the shoes of the old employer.

At Johns Law Partners, our employment law team explains that the basic TUPE meaning is straightforward: employees’ employment is preserved across the transfer. In fact, the government guidance notes that in a TUPE transfer, “the employees’ jobs usually transfer over to the new company … their employment terms and conditions transfer, [and] continuity of employment is maintained”. In short, the new owner inherits all the old employer’s obligations to the workforce.

Automatic Transfer: All staff working in the transferred business automatically become employees of the new employer on the same terms and conditions. For example, if Company A sells a branch to Company B, the branch’s employees move to Company B with no break in service.
Continuity of Service: Employees keep their original start dates and continuous service. This protects benefits based on length of service (like enhanced leave or bonus eligibility).
Preserved Contracts: The new employer must honour existing contracts. Regulation 4(1) of TUPE provides that contracts “have effect after the transfer as if originally made between the person so employed and the transferee”. In other words, the new company “steps into the shoes” of the old one.
Consultation Requirement: By law, both the original (old) and incoming (new) employers must inform and consult affected staff (or their representatives) about the transfer. Employees must be told about the transfer and any planned changes. This obligation reduces uncertainty and helps a smooth handover.
Limited Changes: Any change to employees’ terms or any dismissals connected with the transfer are generally void, unless for a valid economic, technical or organisational (ETO) reason. In practice, this means you cannot cut pay or hours just because a business was sold; any restructuring must be justified by genuine business needs.
Employee Liability Information (ELI): The old employer must give the new employer detailed info on each transferring employee (names, ages, job details, contract terms, disciplinary/grievance history, etc.). This must be provided at least 28 days before the transfer (or as early as possible) to allow the new employer to prepare.

These points summarize the core TUPE transfer definition in UK law. They apply whether the transfer is a sale of a business, a merger, or the outsourcing (or insourcing) of a service. Importantly, even transfers within the same corporate group count as TUPE transfers if the legal employer changes. For example, moving employees from one subsidiary to another subsidiary for business reasons still triggers TUPE.

When Does TUPE Apply? (Business & Service Transfers)

Not every change of employer triggers TUPE. TUPE applies to “relevant transfers”. There are two main types of relevant transfers under the regulations:

Business Transfer: This is any sale or transfer of a business or part of one where the economic entity retains its identity. Examples include the sale of a company’s branch, a merger or demerger, or the sale of assets. Under TUPE, the employees of that business move with it to the new owner.
Service Provision Change: This covers outsourcing, insourcing or re-tendering of service contracts. For instance, if a school outsources its cleaning to a contractor, the cleaning staff move to the new contractor. Similarly, if a new company takes over an existing contract (e.g. security services), the staff transfer along. Working Families explains that a relevant transfer includes when “a client ceases to do activities on its own behalf and those activities are instead carried out by another (outsourcing)”. It also covers reassigning a contract to a new contractor or bringing a contract back in-house.

Conversely, TUPE does not apply to share sales: when one company buys another by purchasing shares, the legal employer remains the same, so contracts do not transfer. In a share sale, the buyer simply takes over the same corporate entity with no change in contracts. TUPE applies when the employer changes, such as an asset sale or service contract move.

For example, If Acme Ltd sells its retail branch to Beta Ltd by selling all the branch’s assets and leases, the branch’s staff transfer to Beta Ltd under TUPE. But if Acme Ltd itself is sold via a share purchase, the contracts continue with Acme Ltd, and TUPE does not operate.

Step-by-Step Guide to the TUPE Transfer Process

Navigating a TUPE transfer involves clear steps and deadlines. Below is a typical step-by-step process that employers and HR teams should follow:

Identify the Transfer Event: Determine if a relevant transfer is happening. Is the business or service moving to a new employer? Check whether it’s a business sale/merger or a service contract change. Also, confirm that the employees affected have contracts “immediately before the transfer” – only those employees fall under TUPE. Remember, even internal restructures can count if the employer changes.
Inform Key Parties (Pre-Transfer): As soon as a transfer is possible, notify your workforce and any trade unions or employee reps. Both the current employer (transferor) and the new employer (transferee) are legally required to inform affected staff about the basic facts of the transfer. This includes the fact that a transfer is due, the proposed date, and what will happen to contracts. Early notice (weeks or months in advance) helps manage anxiety and meet legal requirements.
Consult on Proposed Changes: Hold genuine consultation meetings. Informing is telling staff the facts; consulting means listening to their input on any “measures” (changes) the new employer plans – for example, changes to working arrangements or headcount. Even if no changes are planned, consultation is required to address questions and concerns. This must be done before the transfer, allowing enough time for meaningful discussion. If a union or elected representatives exist, consult with them; otherwise, speak with the employees directly or arrange their election if needed.
Provide Employee Liability Information (ELI): By law, the old employer must give the new employer a detailed list of each transferring employee’s particulars (names, ages, job titles, length of service, key contract terms, disciplinary/grievance history, ongoing claims, etc.). This ELI report must be given at least 28 days before the transfer date. Having accurate, up-to-date information lets the new employer budget for liabilities (back pay, holiday accrual, etc.). It’s wise to update and resend the ELI if anything changes (for example, if an employee leaves or is made redundant before the transfer).
Transfer Day – Contracts Move: On the transfer date, affected employees become employees of the new employer automatically. Their existing contracts and accrued benefits transfer in full. The new employer inherits any legal obligations related to those contracts. (Note: Most pension rights do not transfer under TUPE – these are usually handled by separate pensions law.) From this point, the new employer pays their wages and honours their terms, and treats them as continuing staff.
Post-Transfer Actions: After the transfer, review employment records and communicate the change to all staff. The original employment contracts remain in force, but the new employer may issue confirmation letters to clarify the change of employer. Check that any collective agreements or pending pay reviews continue to apply. Remember, you cannot change a transferred employee’s terms just because of the transfer. Only after at least one year’s service, if there is a genuine economic, technical or organisational (ETO) reason, can you make changes such as reorganising roles or making redundancies. Even then, such changes must be handled carefully and remain subject to consultation.

TUPE Consultation – Informing and Consulting Employees

A major focus of TUPE is communication. Both the old and new employers must work together on this. ACAS confirms that “by law, both the old and new employers must inform and consult with a recognised trade union or employee representatives” before the transfer. This is a legal obligation – you cannot treat it as optional.

Informing: Explain the facts of the transfer in clear terms. Who is buying or taking over the business? When is the transfer date? Which employees will move? This can be done via meetings or written notices. Even if the transfer won’t change employees’ day-to-day roles, you must still inform them of the basics.
Consulting: Discuss any proposed measures that the new employer plans, and listen to employee views on them. “Measures” could include changes to working hours, a new management structure, or transfers of contract work. Consultation must be genuine – it’s not enough to simply inform staff and call it a day. If employees or their representatives raise points, the employers should consider and respond to them before finalising plans.

Timing: There’s no fixed period set by law, but ACAS stresses “there’s no fixed length of time” – you just must allow enough time to inform and fully consult. Start as early as possible once a transfer is likely; this meets the legal requirement and helps avoid last-minute crises. The length of consultation will depend on factors like how many employees are affected and the complexity of any changes.

Who to Consult: If a recognised trade union or elected employee representatives exist, consult with them first. If not, and especially in smaller organisations, you may need to consult directly with individual employees. For very small transfers (e.g. fewer than 10 employees), consulting individually is required by law if there are no reps

Consequences of Non-Compliance: Failing to inform and consult correctly has serious risks. ACAS warns that if the old or new employer does not carry out the consultation properly, “they might be jointly or individually liable” and could face claims in an Employment Tribunal. Affected employees (or their union/reps) can bring a claim. If successful, compensation can be ordered – up to 13 weeks’ uncapped pay for each employee. For example, if employees are not told about the transfer or who the new employer is, they can claim against their employer. Practically, many employers in a sale agree to indemnify each other for consultation failures before closing the deal

Tip: Document every step of the consultation process. Keep records of meetings, letters, and agreements. This evidence is essential in the case of a dispute.

(Suggested Diagram: A timeline showing the consultation period – from initial notice of transfer (e.g. “Day 1: Inform employees”) through ongoing meetings, to the transfer date (e.g. “Day 28: Handover completed”). A similar chart can highlight roles of the old vs. new employer.)

Employer and Employee Obligations under TUPE

TUPE imposes obligations on both employers and employees:

Old Employer (Transferor) Must:
- Supply accurate Employee Liability Information (ELI) to the new employer (names, contract details, etc.) on time.
- Continue to pay and employ staff up to the transfer date.
- Inform and consult with employees or their representatives about the transfer.
- Respond to employees’ objections: if an employee objects to moving, the old employer treats that as a resignation (not a dismissal) on transfer day
New Employer (Transferee) Must:
- Accept all transferring employees on their existing terms.
- Honour any collective agreements or accrued rights (except certain pension rights) of the transferred staff.
- Include transferred employees in their own information/consultation processes from the transfer date onward.
- Provide continued employment; any dismissal of a transferred employee for reasons connected to the transfer is automatically unfair (barring valid ETO reasons).
Employees’ Rights and Actions:
- Employees have the right to transfer or to object. If they object, they remain employed by the old employer, who must pay them for being effectively made redundant (unless the job genuinely ceased).
- Transferred employees keep accrued benefits (like holiday pay, bonuses, and years of service). They also carry over any pending claims (e.g. discrimination or unpaid wages) to the new employer.
- If employers try to impose worse terms, employees may claim unfair dismissal or seek financial remedies. TUPE protects them from contract changes that are motivated by the transfer.

Key Points to Remember: Employees’ contractual rights are mostly frozen in time by TUPE. For the first year after transfer, their contracts cannot be changed unless the change is agreed with the employee or justified by an ETO reason. In short, if you’re not careful, you could inherit a hidden claim or liability. Always conduct due diligence and ask for indemnities covering any undisclosed employee liabilities.

Employee Rights and Protections

For staff, the main benefit of TUPE is security. Employees keep their jobs automatically. They keep all important terms of employment (hours, pay rate, holidays, etc.). The UK Government guidance notes that terms and continuity are maintained. Even probationary periods (if unexpired) carry over.

In addition, the continuity rule means that the qualifying service isn’t broken by the transfer. For example, if Jane had 5 years’ service at the old company, she will still have 5 years’ service on day one with the new company. Any rights that require a certain length of service (like long-service leave, certain parental leave rights, etc.) remain intact.

However, pensions are generally excluded from TUPE. This means occupational pension entitlements will not automatically transfer. Instead, a transferred employee may join the new employer’s pension scheme or receive an alternative pension arrangement. This is a complex area often handled under separate pension protection rules, but it’s important to clarify during the transfer.

If a proposed change is “solely or mainly” because of the transfer, it’s void. For example, reducing pay or worsening holiday entitlement immediately after transfer (for no reason other than the transfer itself) is invalid. On the other hand, changes for genuine business reasons can be made, but typically only after one year and with proper process. The law specifically states that any variations of contracts motivated by the transfer (and not by an ETO reason) are void.

Another important employee protection: If an employee is dismissed “because of” the transfer, they are automatically deemed unfairly dismissed. Regulation 7 confirms that dismissals lacking a valid economic/technical/organisational justification are unfair. Moreover, even if the old employer dismisses a worker to avoid a TUPE transfer, the law treats the dismissal as having been made by both the old and new employers. This means employees can bring an unfair dismissal claim against either party.

Consultation Rights: Employees have the right to be consulted about the transfer (as above). They can nominate an elected representative to speak on their behalf if no union is present. Employers must consider any suggestions made during consultation, although they retain decision-making power. The key is good faith and genuine dialogue.

Examples of TUPE Transfers in Practice

Outsourcing of Services: A council decides to outsource its IT helpdesk to an external provider. The 15 current helpdesk staff will automatically transfer to the new supplier on the same pay and hours. Both employers meet with staff to explain the change. (This is a service provision change.)
Business Sale: Acme Manufacturing sells one of its factories to Beta Industries. All 60 factory workers moved to Beta with continuous service. Beta Industries must honour the workers’ existing collective bargaining agreements. (This is a business transfer.)
Internal Group Transfer: A corporate group reorganises, moving one department from Subsidiary A to Subsidiary B (both part of the same group). Even though the parent company is the same, the employees now have Subsidiary B as their employer, so TUPE applies. The staff are informed and consulted about any new reporting lines.
Contract Reassignment: Company X loses its catering contract at a hospital. The new caterer, Company Y, takes over. The 10 catering staff employed by Company X at the hospital are offered jobs by Company Y on identical terms. (Again, a service change transfer.)

These examples show how diverse TUPE scenarios can be. In each case, employees were protected: they retained pay, benefits, and length of service despite the change in employer.

Practical Tips for Employers and HR

Plan Early: The moment a transfer is likely, set up a project plan. Identify the core team (HR, legal, finance) and schedule information sessions. Early planning avoids rushed mistakes.
Get Legal Advice: TUPE is complex. Consult employment law experts (like our team at Johns Law Partners) to confirm when TUPE applies and to draft clear communication and consultation documents.
Communicate Clearly: Tailor the message to staff’s concerns. Provide FAQS or hold Q&A meetings. Transparency about why the transfer is happening and what will (or won’t) change helps build trust.
Document Everything: Keep records of notices, meeting minutes, and consents. If disputes arise later, these documents are vital evidence of compliance.
Review Employment Contracts and Policies: Ensure all current terms are documented. Check for any upcoming pay reviews or bonus payments due and how those should be handled.
Coordinate with the Other Employer: The old and new employers should coordinate their consultation activities. For example, they might hold joint meetings so employees get consistent information.
Negotiate Transfer Indemnities: Buyers should seek indemnities from sellers for any undisclosed employee liabilities (such as ongoing tribunal claims). This can protect against unexpected costs.
Monitor Legislation Updates: Employment law is evolving. For instance, the UK government has announced a “call for evidence” on improving TUPE protections. While no major changes are in force yet, staying informed ensures future compliance.

TUPE Consultation and Compliance

TUPE consultation is not just a formality – it’s at the heart of the process. HR teams should ensure they cover all the legal topics:

Information to Provide: For each affected employee: the fact of the transfer, the reasons for it, the date, and any contractual or policy changes that may occur. Also, provide the “employee liability information” (ELI) package to the new employer.
Consultation on Measures: Even if you plan no changes, you must ask employees for input and genuinely consider their feedback. If changes are planned (say, shifting offices or altering shifts for efficiency), outline these proposals and listen to concerns.
Use of Representatives: If employees want it, allow the election of representatives (if no union exists). Consult with them in the same way as with a union, even if only a small number of employees are involved.
Timing: Aim to start consultation as soon as a deal is agreed (even subject to contract). ACAS recommends starting early because “the time this takes depends on the size of the organisation, [and] how many employees are affected”. As a rule of thumb, longer is better – squeezing consultation into a couple of weeks is risky unless it’s a tiny business.

Failing to meet these requirements can expose both parties. In one example case, a company that outsourced a cleaning contract without consulting staff was ordered to pay substantial compensation to the employees for failing to inform them of their transfer. Always treat a consultation seriously.

Summary

TUPE transfers are a critical process for UK employers. In summary:

What is TUPE? It’s the law that safeguards employees when a business or contract changes hands.
TUPE meaning: Employees keep their jobs, terms and accrued service with the new employer.
Step-by-step: Identify the transfer, inform and consult staff, provide liability info, and effect the transfer. Document every step.
TUPE consultation: Mandatory discussion with employees (or their reps) by both old and new employers.
Legal insight: Ignoring TUPE obligations can lead to Tribunal claims and heavy costs. Both employers should work together to comply fully.
Employee rights: Staff have continuity of employment and protection against unfair dismissals related to the transfer.

At Johns Law Partners, our experienced employment lawyers regularly advise on TUPE transfers. We can guide you through each step, help with the consultation process, and review your plans to ensure full legal compliance. For further assistance or bespoke advice on an upcoming transfer, contact our employment law team.