TUPE Q and A for Employees: Employer Guide

The Transfer of Undertakings (Protection of Employment) Regulations 2006, or ‘TUPE regulations’, ensure that employees are not unfairly disadvantaged when their employment is transferred to a new employer.

Under TUPE, the employment contracts of transferring employees, including all rights and obligations, must be preserved by the incoming employer, and both the outgoing and incoming employers are legally obligated to follow the correct procedures, including consulting with affected employees and managing any dismissals or redundancies appropriately.

In practice, TUPE transfers are complex and can give rise to many questions from employees that, if not dealt with appropriately, can result in stress, misunderstandings and potential tribunal claims. A key focus of the TUPE provisions is, therefore, to ensure employees are informed of the changes and how they are affected by them.

This article covers the most common questions employees may have regarding TUPE, with practical insights to help employers better prepare for the challenges that come with managing a business transfer under TUPE.

You can read our Comprehensive TUPE Guide for UK Employers here >>

 

Section A: What is TUPE?

 

A TUPE transfer refers to either a ‘business transfer’ or ‘service provision change’, collectively defined as a ‘relevant transfer’ under the TUPE Regulations. However, TUPE does not apply to every business transfer or service provision change; there are specific qualifying conditions that must be met for a transfer to be considered ‘relevant’.

These scenarios include:

 

a. Business Transfers: TUPE applies when an entire business or part of a business is sold or transferred as a going concern. This could happen during mergers, acquisitions, or when a company decides to outsource or bring services back in-house.

 

b. Service Provision Changes: TUPE also applies during changes in service provision, such as when a company outsources a service (e.g., cleaning, catering), changes service providers, or brings a previously outsourced service back in-house. In these cases, the employees engaged in providing the service may transfer to the new provider under the same terms of employment.

 

c. Asset-Only Transfers: It’s important to note that TUPE does not apply to asset-only transfers, where only physical assets are sold without the transfer of a business or workforce.

 

In general, the TUPE regulations will apply when a company is sold or merged with another business, resulting in a new employer. TUPE can also apply in cases where services are outsourced, brought in-house, or where a contract for services is transferred from one provider to another, such as when a company takes over a contract for catering or office cleaning.

If your business is involved in a change of ownership or service provision, it is crucial to determine whether TUPE applies, as this will have significant implications for the transfer of employees. Disagreements over the application of TUPE can arise, particularly regarding whether the transfer qualifies as a ‘relevant transfer’ under the regulations. If there is any uncertainty or if dismissals have occurred in connection with the transfer, it is advisable to seek expert legal advice to ensure compliance and avoid potential legal disputes.

The TUPE regulations are mandatory when the transfer type meets the criteria set out in the legislation. Failure to comply with these regulations can result in legal consequences, including claims for unfair dismissal or discrimination.

Provided a relevant transfer takes place, TUPE will apply, regardless of the size of the organisation involved or whether the transfer results from a single transaction or a series of transactions. However, the business or service provision in question must be situated in the UK immediately before the transfer. Alternatively, the employees involved must be part of ‘an organised grouping of employees’ situated in Great Britain immediately before the service provision change.

In the context of service provision changes, an ‘organised grouping’ refers to a team of people dedicated to performing specific activities on behalf of the client, though this grouping could consist of just one employee. Only those employees who can be clearly identified as providing the service being transferred are protected under TUPE. Additionally, the activities performed by the new service provider must be “fundamentally the same” and for the same client.

TUPE will not apply if the contract is solely for the supply of goods or for a single event or short-term task, such as a conference or exhibition.

If there is any uncertainty or disagreement regarding whether employees form part of the organised grouping following a service provision change or whether TUPE applies to a particular transfer, it is crucial to seek expert legal advice immediately to ensure compliance and mitigate potential risks.

 

Section B: Common Employee TUPE Questions

 

During a TUPE transfer, employees often have concerns about how the change will impact their employment. Employers must provide clear, accurate information and consult with employees or their representatives to discuss any potential changes or measures.

The following are some of the most common questions employees might ask, with suggested responses for employers.

 

Q1. What are my rights as an employee under TUPE?

TUPE is designed to protect and preserve the rights of employees during a business transfer. When TUPE applies, employees who are assigned to the undertaking being transferred will have their employment automatically transferred from the outgoing employer to the incoming employer.

The effect of TUPE is that all assigned employees transfer to the new employer on the same terms and conditions, with their existing employment rights intact, except for certain occupational pension arrangements. The continuity of employment is also maintained, meaning that the employees’ length of service is preserved and deemed to have started from their original start date with the previous employer.
Under TUPE, the new employer effectively steps into the shoes of the old employer, assuming all existing statutory and contractual liabilities. This means that employees’ rights are preserved, including the right to bring a claim against the new employer for any failures by the previous employer to observe those rights.

Employees transferring under TUPE are not considered dismissed, so the transfer does not trigger any entitlement to pay in lieu of notice or redundancy pay unless an actual dismissal occurs. However, a dismissal related solely to the transfer can be deemed automatically unfair under TUPE. Additionally, TUPE protects against certain changes being made to the employees’ contracts by the new employer.

 

Aspect	Before TUPE Transfer	After TUPE Transfer
Employment Contract	Original terms with current employer	Same terms with the new employer
Continuous Employment	Recognized from start date with current employer	Preserved under new employer
Pension Rights	Current pension scheme	Comparable pension scheme provided by the new employer
Redundancy Rights	Based on length of service	Rights maintained, with service continuity recognized
Job Security	Subject to current employer’s policies	Protected under TUPE, no dismissal unless for valid ETO reason

 

Q2: What happens to my employment contract?

Under TUPE, your employment contract will transfer to the new employer automatically, with all its existing terms and conditions intact. This means that your job title, salary, working hours, and other contractual terms should remain exactly the same as they were with your previous employer. The new employer is legally required to honour these terms as if they had been part of the original agreement. Additionally, your continuous employment will be preserved, meaning your length of service and any associated rights will be maintained.

While employers are generally restricted from altering the contract terms and conditions of transferring employees – including pay – as a direct result of the transfer, there are certain exemptions that may allow changes, such as redundancies, if they can be properly justified.

 

Q3: Will my terms and conditions change?

Legally, your terms and conditions cannot be changed solely because of the TUPE transfer. Any attempt by the new employer to alter your contract terms for reasons related to the transfer would be considered unlawful unless it can be justified for an economic, technical, or organisational (ETO) reason that requires changes in the workforce. If such changes are proposed, they must be negotiated and agreed upon with you or your representatives. Unilaterally imposing changes without proper justification and agreement could lead to claims of unfair dismissal or breach of contract.

 

Q4: Can I be made redundant under TUPE?

TUPE itself does not prevent redundancy, but it does offer protection against unfair redundancy related to the transfer. Redundancies can only occur if there is a genuine ETO reason, such as a reorganisation that is necessary after the transfer. If redundancies are necessary, the new employer must follow a fair process, which includes consultation with employees and consideration of alternative roles. If redundancies are made purely because of the transfer, without a valid ETO reason, they could be considered automatically unfair, giving employees grounds to claim unfair dismissal.

 

ETO Category	Definition	Examples
Economic	Reasons related to the financial performance of the business	Cost-cutting measures, need to improve profitability
Technical	Reasons related to the technology or equipment used in the business	Introduction of new technology, changes in production methods
Organizational	Reasons related to the structure or management of the business	Restructuring, mergers, changes in business location

 

Q5: What happens to my pension rights?

Pension rights can be complex under TUPE. While your basic employment rights transfer to the new employer, pension rights under an occupational pension scheme do not transfer in the same way. However, the new employer is required to provide a minimum level of pension provision, which could involve enrolling you in a new pension scheme. The specifics depend on the terms of your existing pension scheme and the new employer’s obligations under the Pensions Act 2004. Employers often provide comparable pension arrangements, but this is an area where it is advisable to seek specific legal guidance.

 

Q6: What if I don’t want to transfer?

If you do not want to transfer to the new employer, you have the right to object. However, it’s important to understand the implications of this decision. By objecting, your employment will terminate on the date of the transfer, and you will not be entitled to redundancy pay or any other compensation unless you can demonstrate that you were forced to object due to significant detrimental changes to your working conditions. If you have concerns about the transfer, it’s advisable to discuss them with your current employer or seek independent advice before making a decision.

 

Section C: Employer Responsibilities Under TUPE

 

Successfully managing a TUPE transfer requires employers to take a proactive approach to their responsibilities throughout the transfer, which can help to alleviate employee concerns and ensure legal compliance.

 

Stage	Key Responsibilities
Pre-Transfer	Inform and consult employees, conduct due diligence, plan for potential changes
During Transfer	Ensure accurate transfer of employee data, communicate regularly, support the transition
Post-Transfer	Integrate transferred employees, maintain terms and conditions, monitor employee morale and productivity, address any emerging issues

1. Communication

 

One of the most critical responsibilities under TUPE is maintaining clear and transparent communication with all employees involved in the transfer. From the outset, it’s important to inform employees about the potential transfer, its implications, and the timeline of events. Employers should provide regular updates and be available to address any concerns employees may have. Effective communication helps to reduce uncertainty and anxiety, ensuring that employees feel informed and valued throughout the process.

 

a. Pre-Transfer: Before the transfer, employers must inform and consult with employee representatives (such as trade unions or elected employee representatives) about the transfer. This should include details about the reasons for the transfer, the implications for employees, and any measures that are planned in connection with the transfer.

 

b. During the Transfer: As the transfer approaches, keep employees informed about any developments and ensure that they know who to contact with questions. Regular meetings, Q&A sessions, and written communications can be effective.

 

c. Post-Transfer: After the transfer, the new employer should introduce themselves, outline their expectations, and provide a clear point of contact for any ongoing concerns. This helps to foster a sense of continuity and stability among the transferred employees.

 

2. Due Diligence

 

Thorough due diligence is essential for employers to fully understand the workforce they are inheriting during a TUPE transfer. This process involves gathering detailed information about the employees who are being transferred, including their employment contracts, job roles, terms and conditions, ongoing grievances, and any potential liabilities.

 

a. Employee Information: Ensure that you have complete and accurate information about the employees who will be transferring. This includes details about their salaries, benefits, working hours, and any special terms in their contracts.

 

b. Liabilities: Assess any potential liabilities that could transfer with the employees, such as ongoing disputes, tribunal claims, or outstanding holiday entitlements. Understanding these liabilities in advance allows you to plan and budget accordingly.

 

c. Cultural Fit: Consider the cultural and operational differences between the transferring employees and your existing workforce. This will help you anticipate any challenges in integration and make the necessary preparations.

 

3. TUPE process

 

Typically, the TUPE process requires the outgoing employer to identify which employees will be transferring and to inform and consult with all affected employees.

As an employer, you are responsible for notifying employees about the transfer if they are being moved to a new employer.

For employees who will remain with the current employer while other staff are transferring in or out, it is important to keep them informed of the transfer, including any proposed changes to existing working practices as a result of the transfer.

If there is a trade union, you must inform and consult with the union representatives. If there is no trade union, you are required to inform and consult with other employee representatives. These representatives may already exist, or you may need to arrange for new ones to be elected specifically for this purpose. In organisations with fewer than ten employees and where there are no existing representatives, you can inform and consult directly with the affected employees.
Before the transfer takes place, you must provide appropriate representatives (or the employees directly, if consulting with them) with written information that includes:

 

a. The fact that the transfer is to take place and who it will affect.

b. The proposed date and reasons for the transfer.

c. The possibility of any reorganisation.

d. The number of agency workers employed, the departments they are working in, and the type of work they are doing.

 

If your employees are transferring to a new employer, you must also inform them of any changes that the incoming employer plans to implement. Under TUPE regulations, these changes, known as “measures,” might include a change in location, different working patterns or hours, changes to pay dates, or potential redundancies.

There is no prescribed length of notice that you must provide to employees regarding a TUPE transfer, as their employment is not being terminated. However, by law, you must give representatives the necessary information well in advance of the transfer so they can discuss it with the employees. The appropriate timing depends on the size of your organisation and the number of employees affected.

Employee representatives (or you, if consulting directly) should invite feedback on any proposed changes. While you are not obligated to agree to any suggestions made, you must demonstrate that you have listened to the feedback and made efforts to resolve any issues before finalising decisions. If no agreement can be reached, you should provide a written explanation of your reasons.

Additionally, you are required to provide the new employer with specific information about the transferring employees at least 28 days before the transfer. This is known as employee liability information (ELI).

If you need assistance in managing the TUPE transfer process, consider consulting with trade union employee representatives or seeking expert legal advice to ensure that the transfer is conducted in compliance with the regulations and that all parties are appropriately informed and consulted.

 

4. Post-Transfer Integration

 

Once the transfer has taken place, the focus shifts to integrating the transferred employees into the existing workforce. This is a critical phase, as it can significantly impact employee morale, productivity, and overall business performance. A well-managed integration process can turn potential challenges into opportunities for growth and improvement.

 

a. Welcoming the New Team: Start by formally welcoming the transferred employees to your organisation. Introduce them to their new colleagues, managers, and support staff. Providing a clear structure and points of contact helps ease the transition.

 

b. Induction and Training: Offer an induction program to help the new employees understand your company’s policies, culture, and expectations. If there are new systems or processes they need to learn, provide adequate training and support to ensure they can perform their roles effectively.

 

c. Team Building: Encourage team-building activities and open communication between existing and new employees. This helps to break down any barriers and fosters a sense of unity and collaboration within the workforce.

 

d. Ongoing Support: Monitor the integration process and be responsive to any issues that arise. Regular check-ins with managers and employees can help identify and address concerns early, preventing them from escalating.

 

Section D: TUPE Non-Compliance

 

By law, you are required to inform and consult with employees when making a TUPE transfer, ensuring they are aware of any changes to their employment. Failure to notify employees or their representatives about a TUPE transfer, including the required information, constitutes a breach of the TUPE regulations.

If there is a failure to comply with the statutory obligation under TUPE to inform and consult, employees or their representatives may file a complaint with the employment tribunal. This could result in an award of damages of up to 13 weeks’ uncapped pay for each affected employee, for which both the outgoing and incoming employers may be jointly or severally liable.

Under TUPE, employees are also afforded certain protections against dismissal and changes to their contract of employment due to the transfer. If an employee is dismissed by either the outgoing or incoming employer, and the sole or principal reason for the dismissal is the transfer, this will be treated by a tribunal as automatically unfair. If the dismissal is for a reason other than the transfer itself, it may still be deemed unfair if the employer has not followed proper redundancy or dismissal procedures.

If an employee believes their terms and conditions have been substantially changed to their detriment before or after a transfer, they may have the right to resign and claim constructive unfair dismissal at a tribunal. TUPE classifies these types of resignations as dismissals. If the sole or principal reason for the change was the transfer, the dismissal will be treated as automatically unfair. If the reason for the change is unrelated to the transfer, the dismissal may still be considered unfair if the employer acted unreasonably.

It is crucial to ensure compliance with TUPE to avoid potential claims. Misunderstanding or ignoring TUPE-related obligations can lead to serious consequences, including legal claims and financial liabilities. Employers must carefully manage the transfer process and seek expert advice where necessary to ensure that both the outgoing and incoming employers fulfil their legal responsibilities and that the rights of employees are fully respected.

Take expert advice early in the process to ensure compliance with TUPE and explore all available options to mitigate risks.

 

Section E: Summary

 

TUPE transfers bring significant legal obligations for UK employers, particularly in relation to the need to consult and inform employees. The process can be challenging, with employers required by law to address questions and concerns from employees about how the transfer will impact their roles, terms, and conditions.

Employees will naturally have questions about the implications of the transfer, including whether their employment contracts will change, how their continuous service will be recognised, and what protections they have against redundancy or dismissal. Employers must provide clear, accurate information and be prepared to consult with employees or their representatives to discuss any potential changes or measures the new employer plans to implement.

Failure to adequately inform and consult can result in legal claims, including complaints to an employment tribunal, which could lead to substantial financial penalties. It is essential for employers to ensure that all communication is timely and comprehensive, addressing all employee concerns thoroughly to maintain trust and compliance with the TUPE regulations.

 

Section F: Need Assistance?

 

Our employment lawyers assist employers in managing the implications of TUPE on employee rights and meeting contractual obligations. If you are considering changes to employment contracts or terms in connection with a TUPE transfer, it is essential to seek legal advice as early as possible.

We can carefully review the reasons and justifications for any proposed changes and identify potential risks or areas where challenges may arise. Our goal is to help you ensure that all employees’ terms and conditions are upheld during and after the transfer and to mitigate the risk of any claims arising from perceived unfair treatment.

Timing is crucial. Whether you are addressing employee objections to the transfer, negotiating new terms, or managing an exit strategy, we will guide you through the next steps to ensure compliance with TUPE and minimise operational disruption.

If there are existing workplace complaints or disputes, we can advise on how these may be impacted by the transfer. All employment liabilities, both statutory and contractual, will pass to the new employer, and we can help you manage these obligations effectively.

We also provide advice on issues related to continuity of service, redundancy payments, arrears of pay, and holiday entitlement in the context of a TUPE transfer. For specialist advice tailored to your situation, contact us.

 

Section G: TUPE FAQs

 

What is TUPE, and why is it important for employers?
TUPE (Transfer of Undertakings Protection of Employment) is a set of regulations in the UK that protect employees’ rights when their employment is transferred to a new employer due to a business transfer or service provision change. It is crucial for employers to understand TUPE to ensure compliance with the law and to manage the transition effectively without disrupting business operations or facing legal penalties.

 

When does TUPE apply?
TUPE applies in situations where a business, or part of a business, is transferred to a new owner or when there is a change in service provision (e.g., outsourcing, insourcing, or changing service providers). It does not apply to asset-only transfers where no employees are involved.

 

What are the key responsibilities of an employer under TUPE?
Employers must ensure that employees’ terms and conditions of employment are preserved during the transfer, consult with employee representatives about the transfer, and comply with all legal obligations to avoid unfair dismissal claims. Effective communication, thorough due diligence, and proper post-transfer integration are also essential responsibilities.

 

Can an employer change employees’ terms and conditions after a TUPE transfer?
Generally, employers cannot change employees’ terms and conditions solely because of the transfer. Any changes must be justified by an Economic, Technical, or Organisational (ETO) reason and agreed upon with the employees or their representatives. Unlawful changes can lead to claims of unfair dismissal or breach of contract.

 

What should employers do if employees object to the transfer?
If an employee objects to the transfer, their employment will terminate on the date of the transfer, and they will not be entitled to redundancy pay or compensation unless they can prove that the transfer would have resulted in a significant detrimental change to their working conditions. Employers should handle objections carefully and seek legal advice if necessary.

 

How should employers handle redundancies during a TUPE transfer?
Redundancies can be made during a TUPE transfer if there is a genuine ETO reason, such as a necessary reorganisation. However, employers must follow a fair redundancy process, including proper consultation with employees. Redundancies that occur purely because of the transfer, without a valid ETO reason, may be deemed automatically unfair.

 

What are the risks of non-compliance with TUPE?
Non-compliance with TUPE can result in serious legal consequences, including claims for unfair dismissal, breach of contract, and compensation orders. It can also damage the employer’s reputation and lead to loss of employee trust and morale. To mitigate these risks, employers should ensure they fully understand and comply with TUPE regulations.

 

How can employers ensure a smooth post-transfer integration?
To ensure smooth post-transfer integration, employers should welcome the transferred employees, provide a comprehensive induction and training program, encourage team-building activities, and offer ongoing support to address any concerns. Maintaining open communication and being responsive to issues as they arise are key to successful integration.

 

Do pension rights transfer under TUPE?
Pension rights under an occupational pension scheme do not transfer in the same way as other employment terms. However, the new employer must provide a minimum level of pension provision. The specifics can vary, so employers should seek legal advice to ensure they meet their obligations.

 

What should employers do if a dispute arises during a TUPE transfer?
If a dispute arises, employers should first try to resolve it through open communication and mediation. If the dispute cannot be resolved internally, seeking legal advice is important to manage the situation and avoid potential legal claims. Proper documentation and a clear understanding of the legal framework can help in resolving disputes effectively.

 

Section H: Glossary

 

Term	Definition
TUPE	Transfer of Undertakings (Protection of Employment) regulations designed to protect employees’ rights when their employment is transferred to a new employer.
ETO Reason	Economic, Technical, or Organisational reason that justifies changes to employees’ terms and conditions or redundancies post-transfer.
Business Transfer	A situation where a business or part of a business is sold or transferred as a going concern to a new employer.
Service Provision Change	When a service, such as outsourcing, insourcing, or changing service providers, is transferred, and employees engaged in that service may transfer to the new provider.
Consultation	The legal requirement for employers to inform and consult with employees or their representatives about the TUPE transfer and any measures being considered.
Continuous Employment	The preservation of an employee’s length of service and associated rights, such as redundancy pay, during a TUPE transfer.
Unfair Dismissal	Dismissal of an employee that is deemed to be unjust, particularly when it is solely due to a TUPE transfer without a valid ETO reason.
Due Diligence	The process of gathering and assessing detailed information about the workforce being transferred, including contracts, liabilities, and other employment terms.
Employee Representative	A person elected or appointed to represent employees during consultation processes, often in the context of a TUPE transfer.
Occupational Pension Scheme	A pension scheme provided by an employer, which may not transfer automatically under TUPE, although the new employer must provide comparable pension benefits.
Redundancy	Termination of employment due to the employer’s need to reduce the workforce, which can occur during a TUPE transfer if there is a valid ETO reason.
Post-Transfer Integration	The process of merging transferred employees into the new employer’s existing workforce, focusing on maintaining morale, productivity, and a smooth transition.
Automatic Transfer	The principle under TUPE that employees’ contracts automatically transfer to the new employer with their terms and conditions unchanged.
Breach of Contract	A violation of the terms agreed in an employment contract, which can occur if an employer unlawfully changes terms or conditions post-TUPE transfer.
Legal Compliance	The requirement for employers to adhere to TUPE regulations and other employment laws during the transfer process to avoid legal penalties and disputes.

 

Section I: Additional Resources

 

UK Government TUPE Guidance
https://www.gov.uk/transfers-takeovers
The official UK government page provides comprehensive guidance on TUPE regulations, including when they apply, employee rights, and employer responsibilities during business transfers.

 

ACAS (Advisory, Conciliation and Arbitration Service) – TUPE
https://www.acas.org.uk/tupe
ACAS offers practical advice for employers and employees on managing TUPE transfers, with a focus on handling redundancies, consultation processes, and legal compliance.

 

The Employment Rights Act 1996
https://www.legislation.gov.uk/ukpga/1996/18/contents
This legislation outlines key employment rights in the UK, including those related to TUPE, helping employers understand their obligations during a transfer.

 

CIPD – TUPE Transfers
https://www.cipd.co.uk/knowledge/fundamentals/emp-law/tupe
The Chartered Institute of Personnel and Development (CIPD) provides an in-depth overview of TUPE regulations, best practices for HR professionals, and case studies to guide employers through the transfer process.

 

TUPE Checklist for Employers (XpertHR)
https://www.xperthr.co.uk/guidance/tupe-checklist/
XpertHR offers a practical checklist to help employers manage TUPE transfers effectively, covering key steps such as due diligence, employee consultation, and post-transfer actions.

 

The Pensions Regulator – TUPE and Pensions
https://www.thepensionsregulator.gov.uk/en/employers/advice-for-businesses/transfers-and-outsourcing
This resource outlines the pension obligations under TUPE, providing essential information for employers on how to comply with pension regulations during business transfers.