TUPE Redundancy Guide for UK Employers 2024

When businesses undergo a transfer, such as a merger, acquisition, or outsourcing, the Transfer of Undertakings (Protection of Employment) regulations, commonly known as TUPE, take effect with the aim of protecting employees’ rights. This means that, in most cases, employees should not see any changes to their contracts, pay, or benefits as a result of the transfer.

However, in certain situations, employers may find it necessary to make redundancies as part of the transfer process. Redundancy in the context of TUPE can arise if there is a genuine business need to reduce the workforce, such as when a role is no longer required in the newly structured business.

For employers, managing redundancies within the framework of a TUPE transfer can, however, be challenging, as it involves balancing the commercial pressures of restructuring a business with legal obligations to protect employees’ rights.

Redundancies must, therefore, be handled carefully to ensure they are fair and legally compliant, especially under the framework of TUPE regulations. Failure to adhere to these regulations can lead to serious legal consequences, including costly claims for unfair dismissal, breach of contract, and potential damage to the business’s reputation.

In this comprehensive guide to TUPE redundancies, we explain the rules for employers, including how redundancy can be managed in a compliant manner during business transfers, and best practices for mitigating legal risks.

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

 

Section A: Understanding TUPE Regulations

 

The Transfer of Undertakings (Protection of Employment) Regulations 2006, commonly known as TUPE, are designed to protect employees’ rights when a business, or part of it, is transferred from one owner to another.

The primary purpose of TUPE is to ensure that employees are not disadvantaged by a change in ownership. Under these regulations, the employees’ contracts of employment automatically transfer to the new employer with all their existing terms and conditions intact. This includes salaries, holiday entitlements, pension rights, and other benefits, effectively preserving the employees’ rights as if nothing had changed apart from the identity of their employer.

TUPE is intended to provide stability and continuity for employees in situations where the business they work for changes ownership, protecting them from unfair dismissal or changes to their employment terms due to the transfer.

 

1. When TUPE Applies

 

TUPE applies in several scenarios, which typically involve the transfer of a business or service provision from one employer to another. The most common situations where TUPE comes into play include:

 

a. Business Sales and Acquisitions

When a business or part of a business is sold to another company, the employees of the business being sold are transferred to the new owner. This is one of the most straightforward applications of TUPE.

 

b. Mergers

When two businesses merge, employees from the merging businesses are transferred to the new, combined entity under TUPE. This ensures that employees retain their employment contracts and associated rights.

 

c. Outsourcing

When an organisation decides to outsource a function (such as IT support, cleaning, or catering) to an external provider, TUPE typically applies. The employees working in that function transfer to the outsourcing company under the same terms and conditions.

 

d. Insourcing

If a previously outsourced service is brought back in-house, TUPE will apply to the employees of the external provider who were involved in delivering that service.

 

e. Service Provision Changes

TUPE also applies when a contract for services, such as facilities management or security, is awarded to a new contractor, ensuring that employees working on that contract transfer to the new service provider.

 

2. Employer Obligations under TUPE

 

When a business transfer takes place, both the outgoing employer (often referred to as the “transferor”) and the incoming employer (known as the “transferee”) have specific legal obligations under TUPE.

 

a. Responsibilities of the Outgoing Employer (Transferor)

 

Responsibility	Description
Provision of Employee Liability Information	Must provide the incoming employer with essential information about the transferring employees, including identities, terms, conditions, disciplinary records, and any existing claims or disputes. This information must be provided at least 28 days before the transfer.
Consultation and Communication	Required to inform and consult with affected employees or their representatives about the transfer, including reasons, timing, and potential impacts. Must also communicate if redundancies are anticipated.
Protection from Unfair Dismissal	Must ensure no employee is dismissed solely due to the transfer, unless justified by an economic, technical, or organisational (ETO) reason.

 

The outgoing employer must provide the incoming employer with essential information about the employees who will be transferring. This includes details such as identities, terms and conditions, disciplinary records, and any existing claims or disputes. This information must be provided at least 28 days before the transfer date.

The outgoing employer is also required to inform and consult with the affected employees (or their representatives, such as a trade union) about the transfer. This consultation must cover the reasons for the transfer, the timing, and any potential impact on the employees. If redundancies are anticipated, this must also be communicated.

Finally, the outgoing employer must ensure that no employee is dismissed solely because of the transfer unless there is an economic, technical, or organisational (ETO) reason entailing changes in the workforce.

 

b. Responsibilities of the Incoming Employer (Transferee)

 

Responsibility	Description
Honouring Existing Employment Contracts	Must take on employees with their existing contracts, including all terms and conditions. Changes can only be made if a valid economic, technical, or organisational (ETO) reason exists and are agreed upon with employees.
Consultation and Communication	Must inform and consult with affected employees about any measures planned post-transfer, such as changes to work practices, locations, or redundancies.
Handling of Redundancies	Must handle any necessary redundancies in accordance with UK redundancy law, ensuring a fair process, appropriate notice, and redundancy payments.
Liability for Employment Claims	Assumes liability for any employment-related claims arising after the transfer, such as unfair dismissal or discrimination. Thorough due diligence is essential.

 

The incoming employer is obligated to take on the employees with their existing contracts of employment, including all terms and conditions. The new employer cannot alter these terms unless a valid ETO reason exists, and even then, changes must be agreed upon with the employees.

Like the outgoing employer, the incoming employer must also inform and consult with the affected employees about any measures they plan to take that will affect the employees following the transfer. This could include changes to work practices, locations, or even redundancies if necessary.

If redundancies are necessary post-transfer, the incoming employer must handle these in line with UK redundancy law, ensuring that the process is fair and that affected employees receive the appropriate notice and redundancy payments.

The incoming employer assumes liability for any employment-related claims that arise post-transfer. This could include claims for unfair dismissal, discrimination, or breaches of contract, which is why thorough due diligence and careful planning are essential during the transfer process.

 

Section B: Redundancy in the Context of TUPE

 

When a business undergoes a transfer under the TUPE regulations, one of the key concerns for both employers and employees is the potential for redundancies.

While TUPE is primarily designed to protect employees’ rights during such transfers, there may be circumstances where redundancies may still be necessary. However, these redundancies must be handled with care to ensure they are legally compliant and fair.

 

1. Potential Redundancy Situations

 

Redundancy in the context of a TUPE transfer typically arises when there is a genuine business need to reduce the workforce following the transfer. Some common situations where redundancy might be necessary include:

 

a. Post-Transfer Restructuring

After a transfer, the new employer may decide to reorganise the business for operational efficiency. This restructuring could result in some roles becoming redundant, especially if there is an overlap in job functions between the incoming and existing workforce.

 

b. Economic, Technical, or Organisational (ETO) Reasons

Redundancies may occur due to economic, technical, or organisational changes following the transfer. For example, if the business is facing financial difficulties (economic), if new technology reduces the need for certain roles (technical), or if the business strategy shifts (organisational), redundancies may be considered.

Importantly, redundancies directly linked to the transfer itself, without valid ETO reasons, are typically considered automatically unfair under TUPE.

 

c. Changes in Location

If the new employer decides to relocate the business or certain operations to a different site, employees who are unable or unwilling to move may face redundancy. This situation often arises in mergers or acquisitions where the new owner consolidates operations into a single location.

 

d. Reduction in Business Volume

If the transferred business experiences a decline in demand or volume of work, the new employer may need to reduce the workforce to match the lower level of business activity.

 

2. Legal Criteria for Redundancy

 

For a redundancy to be considered fair and lawful under UK employment law, it must meet specific legal criteria. These same criteria also apply in TUPE scenarios.

 

a. Genuine Redundancy Situation

The redundancy must be based on a genuine need to reduce the workforce. This could be due to the closure of the business, the closure of a particular workplace, or a reduced need for employees to carry out work of a particular kind. The employer must be able to demonstrate that the role is genuinely redundant and that the decision is not related to the transfer itself unless justified by an ETO reason.

 

b. Fair Selection Process

If only some employees within a particular group are to be made redundant, the employer must use a fair and objective selection process to determine who will be made redundant. This process should consider factors such as skills, experience, performance, and disciplinary record rather than arbitrary or discriminatory criteria.

 

c. Adequate Notice and Redundancy Pay

Employees who are made redundant must receive the appropriate notice period as specified in their contract or by statutory requirements. In addition, employees with two or more years of service are entitled to statutory redundancy pay, which increases with the length of service and the employee’s age.

 

d. Consideration of Alternatives

Before making redundancies, the employer should explore all possible alternatives, such as redeploying employees to other roles within the organisation. This effort demonstrates that redundancy is truly a last resort.

 

3. Consultation Requirements

 

Consultation is a central aspect of the redundancy process under TUPE. Employers have a legal obligation to inform and consult with affected employees or their representatives to ensure that the process is transparent and that employees are given a fair opportunity to engage with the process.

If an employer is proposing to make 20 or more employees redundant within a 90-day period, collective consultation is required. This means that the employer must consult with recognised trade unions or elected employee representatives. The consultation must begin at least 30 days before the first redundancy (45 days if 100 or more employees are affected) and should cover the reasons for the redundancies, the numbers and categories of employees affected, and how the redundancies will be carried out.

In addition to collective consultation, employers must also consult individually with each employee at risk of redundancy. This consultation should provide employees with an opportunity to discuss the reasons for redundancy, explore any alternatives, and raise any concerns they might have. The employer must consider the employee’s feedback and respond to any queries or suggestions.

During the consultation process, employers must provide detailed information to the employee representatives, including the reasons for the proposed redundancies, the number and categories of employees affected, the selection criteria, and the process for carrying out the redundancies.

The consultation process cannot be used as a formality; employers must genuinely consider any responses or proposals made by employees or their representatives. Failure to do so can lead to claims of unfair dismissal.

 

Section C: TUPE Redundancy Process

 

Employers are required by law to conduct redundancies fairly and in compliance with both the TUPE regulations and wider UK employment laws during every stage of the transfer process.

 

Action	Timeline	Responsible Party
Initial Employee Notification	As soon as the transfer is planned	Transferor and Transferee
Consultation with Employees	At least 30 days before transfer (45 days if 100+ employees)	Transferor and Transferee
Provision of Employee Liability Information	At least 28 days before transfer	Transferor
Redundancy Selection Process	Post-transfer, if necessary	Transferee
Implementation of Redundancies	After consultation and notice periods	Transferee

 

1. Pre-Transfer Steps

 

Before initiating a transfer, conduct a comprehensive review of the business functions, workforce structure, and operational needs. Identify any areas where redundancies might be necessary due to economic, technical, or organisational (ETO) reasons.

If redundancies are anticipated, develop a detailed plan outlining the rationale for redundancies, the number of roles affected, the selection criteria, and the timeline. This plan should be carefully documented and aligned with TUPE regulations.

[insert table 5. Selection Criteria for Redundancy]

Begin communicating with employees as early as possible. Transparency is crucial, even if the details are not fully finalised. Inform employees about the potential transfer, any changes that may occur, and the possibility of redundancies. Early communication helps to build trust and reduce anxiety.

Engage with employee representatives, such as trade unions or elected employee representatives, to discuss the potential impact of the transfer and redundancies. This consultation should be meaningful, allowing for feedback and suggestions from the representatives.

The outgoing employer (transferor) must prepare and provide the incoming employer (transferee) with employee liability information at least 28 days before the transfer. This includes details such as employee identities, employment terms, and any ongoing disputes or claims.

 

2. During Transfer

 

Throughout the transfer process, maintain regular communication with employees and their representatives. Keep them informed about the transfer’s progress, any decisions made regarding redundancies, and the expected timeline.

Ensure that there is close coordination between the outgoing and incoming employers to facilitate a smooth transition. Both parties should work together to address any employee concerns and ensure that the transfer of employment rights is seamless.

Transitions can be stressful for employees, leading to uncertainty and low morale. Monitor employee sentiment and address concerns promptly. Consider holding town hall meetings or Q&A sessions to provide reassurance and clarify any doubts.

Be aware of the legal risks associated with redundancies during a TUPE transfer. Ensure that the redundancy process is compliant with employment law and that any dismissals are justified by valid ETO reasons.

 

3. Post-Transfer

 

After the transfer, reassess the business structure and workforce needs. Determine if the planned redundancies are still necessary and if they align with the current business strategy.

If redundancies are necessary, follow a fair and transparent process. Use objective selection criteria, provide adequate notice, and offer redundancy pay where applicable. Ensure that affected employees have the opportunity to discuss their situation and explore alternative roles within the organisation.

Offer support to employees who are made redundant. This could include outplacement services, career counselling, or financial advice. Supporting employees during this difficult time can help maintain the company’s reputation and morale among the remaining workforce.

 

Service	Description
Outplacement Services	Career counseling, resume writing, and job search assistance.
Financial Advice	Support in managing finances post-redundancy, including pensions and savings.
Retraining Programs	Opportunities for redundant employees to learn new skills or transition to new roles.
Mental Health Support	Counseling services to help manage the stress and emotional impact of redundancy.
Networking Opportunities	Events or services that help redundant employees connect with potential employers.

 

Finally, ensure detailed records of the redundancy process are kept, including consultation meetings, selection criteria, and any decisions made, for use in the event of legal challenges or disputes.

 

Section D: TUPE Redundancy Common Pitfalls

 

While managing redundancies during a TUPE transfer, even well-prepared employers can encounter challenges that lead to costly mistakes. These pitfalls often arise from misunderstandings of the regulations, inadequate planning, or insufficient communication with employees. Recognising these common issues in advance can help employers avoid potential legal disputes and ensure a smoother process.

 

Pitfall	Description	How to Avoid
Insufficient Consultation	Failing to consult properly with employees or representatives.	Start consultation early, provide all necessary information.
Inadequate Planning	Rushing the process without thorough planning.	Develop a detailed plan covering all aspects of the transfer.
Ignoring Employee Concerns	Not addressing employee feedback or concerns during the process.	Actively listen and respond to employee queries and suggestions.
Poor Documentation	Failing to keep records of the process.	Document all steps, communications, and decisions made.
Improper Redundancy Process	Not following a fair and legal redundancy process post-transfer.	Ensure the process is fair, objective, and legally compliant.

 

1. Insufficient Consultation

One of the most common mistakes is failing to conduct proper consultation with employees or their representatives. This can lead to claims of unfair dismissal and non-compliance with TUPE. To avoid this, ensure that consultation is meaningful, starts early, and covers all relevant aspects of the transfer and redundancy.

 

2. Inadequate Planning

Rushing through the transfer and redundancy process without proper planning can result in mistakes, such as unfair selection for redundancy or failure to provide adequate notice. Detailed planning and early preparation are key to avoiding these pitfalls.

 

3. Ignoring Employee Concerns

Dismissing or downplaying employee concerns can lead to resentment, low morale, and increased risk of disputes. Employers should actively listen to employee feedback and address concerns in a timely and empathetic manner.

 

4. Failure to Provide Clear Communication

Poor communication during a TUPE transfer can lead to confusion, rumours, and mistrust. Employers should communicate clearly and consistently, providing regular updates and making sure employees understand their rights and the steps being taken.

 

5. Poor Record Keeping

Failing to keep detailed records of the redundancy process can be problematic if disputes arise. Employers should document every stage of the process, including consultation meetings, decisions made, and communications with employees.

 

Section E: Employee Rights and Employer Liabilities under TUPE

 

When managing a business transfer under the TUPE regulations, employers must be acutely aware of the legal implications and potential liabilities that arise.

 

1. Employee Rights

 

Under TUPE, employees are afforded a number of significant rights designed to protect them during a business transfer. These rights are central to ensuring that employees do not suffer as a result of the transfer and that their terms of employment remain consistent.

 

a. Preservation of Employment Terms

One of the core principles of TUPE is that the terms and conditions of employment must remain unchanged when employees transfer to the new employer. This includes their salary, working hours, holiday entitlements, and any other contractual benefits. The new employer cannot unilaterally change these terms without the employee’s consent unless there is a valid economic, technical, or organisational (ETO) reason that requires changes, and these are agreed upon through consultation.

 

b. Protection from Unfair Dismissal

Employees are protected from being dismissed solely because of the transfer. Any dismissal that occurs because of the transfer is automatically deemed unfair unless it can be justified by an ETO reason. This protection also extends to dismissals related to proposed changes to terms and conditions that are connected to the transfer.

 

c. Redundancy Pay

If redundancies are necessary post-transfer, employees who are made redundant are entitled to statutory redundancy pay if they have been employed for at least two years. The amount of redundancy pay depends on the employee’s age, length of service, and weekly pay, subject to statutory limits.

 

d. Notice Periods

Employees who are made redundant must also be given appropriate notice according to their employment contract or statutory notice periods, whichever is longer. The statutory notice period is typically one week for each year of service, up to a maximum of 12 weeks.

 

e. Right to Consultation

Employees have the right to be informed and consulted about the transfer and any proposed changes, including redundancies. This consultation should be meaningful, allowing employees to provide input and ask questions about how the transfer and any redundancies will affect them.

 

Right	Description
Preservation of Employment Terms	Employees retain their current terms and conditions post-transfer.
Protection from Unfair Dismissal	Employees cannot be dismissed solely because of the transfer unless there’s an ETO reason.
Redundancy Pay	Employees are entitled to statutory redundancy pay if made redundant post-transfer.
Notice Period	Employees must be given the notice period specified in their contract or by statutory law.
Consultation	Employees have the right to be consulted about the transfer and any proposed redundancies.

 

2. Potential Legal Challenges

 

Despite the protections offered under TUPE, employers may still face legal challenges during and after the transfer process. These challenges often arise when employees believe their rights have been violated or when the process is not conducted in a compliant manner.

 

a. Claims of Unfair Dismissal

If employees are dismissed because of the transfer, or if redundancies are not handled in accordance with the law, they may file claims for unfair dismissal. These claims can be costly and damaging to the employer’s reputation. Employers must ensure that any dismissals are justified by an ETO reason and that the process is fair and transparent.

 

b. Disputes Over Changes to Employment Terms

Employers may face disputes if they attempt to change the terms and conditions of employment without proper consultation and agreement. Such changes can be seen as a breach of contract, leading to potential claims for constructive dismissal or breach of contract.

 

c. Failure to Consult

Employers are legally required to consult with employees or their representatives about the transfer and any proposed changes. Failure to do so can result in legal claims and penalties. Employees may claim that their rights to be informed and consulted have been breached, leading to compensation claims.

 

d. Breach of TUPE Regulations

If an employer fails to comply with TUPE regulations, they may face legal action from employees or their representatives. This could include claims for failing to preserve employment terms, not providing proper notice or mishandling redundancies.

 

e. Discrimination Claims

If employees believe they have been selected for redundancy based on discriminatory criteria (such as age, gender, race, or disability), they may bring a discrimination claim against the employer. These claims can be particularly damaging and may result in significant compensation awards.

 

3. How to Mitigate Risk

 

Given the potential for legal challenges, employers should take proactive steps to mitigate the risks associated with TUPE transfers.

 

a. Due Diligence

Before the transfer, conduct comprehensive due diligence to understand the full scope of liabilities, including existing employee disputes, ongoing claims, and contractual obligations. This helps to identify potential risks early and allows for informed decision-making.

 

b. Ensure Clear and Early Communication

Communicate with employees as early as possible about the transfer, any proposed changes, and the reasons behind them. Transparency helps to build trust and reduces the likelihood of disputes. Ensure that all communication is clear, accurate, and consistent.

 

c. Engage in Meaningful Consultation

Consultation with employees and their representatives should be genuine and not merely a formality. Listen to employee concerns, consider their feedback, and explore all options before making decisions. Proper consultation can help to prevent claims of unfair dismissal or failure to consult.

 

d. Document the Process

Keep detailed records of all actions taken during the transfer process, including consultation meetings, decisions made, and communication with employees. This documentation is essential in defending against any potential legal claims and demonstrating compliance with TUPE.

 

e. Review and Update Policies

Regularly review and update your company’s redundancy and transfer policies to ensure they are compliant with the latest employment laws and best practices. Clear, up-to-date policies can help to standardise the process and reduce the risk of errors.

 

f. Offer Support to Affected Employees

Providing support to employees who are affected by redundancies, such as outplacement services or career counselling, can help to maintain morale and reduce the likelihood of disputes. Supporting employees during the transition shows that the company values their contributions, even if their role is no longer required.

 

Section F: Case Studies

 

The following examples illustrate how the TUPE redundancy rules can work in practice.

 

Case Study 1: Manufacturing Merger and Workforce Consolidation

A medium-sized manufacturing company, Company A, was acquired by a larger competitor, Company B, leading to a TUPE transfer. Company A and Company B both operated similar production facilities in the same region. Post-acquisition, Company B decided to consolidate operations to improve efficiency and reduce costs, leading to potential redundancies in overlapping roles.

Company B initiated the process by conducting a detailed analysis of the workforce and identifying roles that were duplicated across both companies. Early communication with employees was prioritised, with regular updates provided about the ongoing review and potential impacts.

Company B engaged with employee representatives from both companies well in advance of the transfer. They explained the business rationale for the consolidation and proposed redundancy process. Employees were given the opportunity to ask questions and provide feedback.

A fair and objective selection process was developed, focusing on skills, experience, and performance. Company B offered voluntary redundancy packages to reduce the need for compulsory redundancies, which were taken up by several employees nearing retirement age.

For those employees who were made redundant, Company B provided outplacement services, including resume writing assistance, job search support, and financial advice. They also offered retraining opportunities within the company for those willing to shift to different roles.

The process was carried out with minimal disruption to operations. The early and transparent communication helped to maintain trust and morale among the workforce, and the voluntary redundancy packages reduced the number of compulsory redundancies. There were no legal disputes or claims for unfair dismissal.

 

Case Study 2: Outsourcing IT Services

A large financial services company, Company C, decided to outsource its IT support services to a third-party provider, Company D, as part of a broader cost-saving initiative. The transfer involved moving 50 IT employees from Company C to Company D under TUPE regulations. Company D planned to streamline its operations, leading to potential redundancies among the transferred employees.

Company D conducted thorough due diligence before the transfer to understand the skills, roles, and employment terms of the employees being transferred. This allowed them to plan effectively for the integration and identify areas where redundancies might be necessary.

Both companies engaged in a detailed consultation process with the affected employees and their representatives. Company D explained the need for restructuring and the criteria that would be used to select employees for redundancy.

Company D offered redeployment opportunities to other areas of the business where possible. Employees who could not be redeployed were offered enhanced redundancy packages as a goodwill gesture, which included extended notice periods and additional financial compensation.

Throughout the process, Company D worked closely with legal advisors to ensure that all aspects of the redundancy process were compliant with TUPE and UK employment law.

The transition was completed with minimal disruption, and the majority of employees accepted either redeployment or the enhanced redundancy packages. The enhanced packages and clear communication helped to prevent any legal claims or disputes.

 

Case Study 3: Service Provision Change in Facilities Management

A local government authority decided to change its facilities management service provider from Company E to Company F. The transfer involved the TUPE transfer of 30 cleaning and maintenance staff from Company E to Company F. Company F planned to modernise the facilities management process, which required fewer staff due to the introduction of new technology and more efficient working practices.

Company F, in collaboration with the local authority, developed a communication plan that informed all affected employees about the upcoming transfer and the potential changes to the workforce.

Recognising the introduction of new technology, Company F offered training programmes to upskill the transferring employees. This was part of their strategy to reduce redundancies by equipping employees with the skills needed for the new roles.

Despite the training efforts, some redundancies were inevitable. Company F used a fair and transparent selection process, focusing on the roles that were genuinely redundant due to the new technology. Affected employees were offered statutory redundancy pay along with additional career transition support.

Company F provided ongoing support to remaining employees to help them adapt to the new systems and processes. This included additional training and regular feedback sessions to address any concerns.

The transfer and subsequent redundancy process were completed successfully, with the majority of employees either redeployed or retrained. Only a small number of redundancies were necessary, and those were handled without any legal disputes.

 

Section G: Summary

 

Managing redundancies within the context of a TUPE transfer is a complex process that requires careful planning, strong communication and compliance with strict legal obligations.

For employers, the key risks associated with TUPE redundancy involve ensuring that any dismissals are legally justified. Redundancies directly linked to the transfer without a valid economic, technical, or organisational (ETO) reason are typically considered automatically unfair, which could lead to costly legal challenges.

Employers must also be mindful of the legal obligation to consult with employees or their representatives about the transfer and any proposed redundancies. Failure to do so can result in compensation claims. Additionally, the process of selecting employees for redundancy must be fair and transparent, based on objective criteria to avoid claims of unfair dismissal.

 

Section H: Need Assistance?

 

Our employment law experts work with employers to help steer them through the complexities of the TUPE provisions. We have specific expertise in redundancies and provide guidance to employers to reduce the risk of disputes and maintain good employee relations during the transition. Contact us for specialist advice.

 

Section I: TUPE Redundancy for Employers FAQs

 

What is TUPE and why is it important?
TUPE (Transfer of Undertakings (Protection of Employment)) is a UK regulation that protects employees’ rights when a business or part of a business is transferred to a new employer. It is important because it ensures that employees’ terms and conditions of employment are preserved during the transfer, preventing them from being unfairly dismissed or subjected to detrimental changes in their employment contracts.

 

When can redundancies occur under TUPE?
Redundancies can occur under TUPE if there is a genuine business need, such as economic, technical, or organisational (ETO) reasons that require changes in the workforce. Redundancies directly linked to the transfer itself, without valid ETO reasons, are generally considered automatically unfair.

 

What are the legal requirements for making redundancies after a TUPE transfer?
To make redundancies after a TUPE transfer, employers must demonstrate that the redundancies are necessary due to genuine ETO reasons. The redundancy process must be fair, involving a clear selection process, proper consultation with employees, and the provision of redundancy pay and notice periods as required by law.

 

What are the consultation requirements under TUPE?
Employers must inform and consult with employees or their representatives (such as trade unions) about the transfer and any proposed redundancies. If 20 or more employees are at risk of redundancy, collective consultation is required, which must begin at least 30 days before the first redundancy (or 45 days if 100 or more employees are affected).

 

Can an employer change the terms and conditions of employment after a TUPE transfer?
Generally, an employer cannot unilaterally change the terms and conditions of employment after a TUPE transfer unless there is a valid ETO reason for the change, and the changes are agreed upon with the employees through consultation. Any changes that disadvantage employees and are directly linked to the transfer could be deemed unfair.

 

What happens if an employer fails to comply with TUPE regulations?
Failure to comply with TUPE regulations can lead to serious legal consequences, including claims for unfair dismissal, breach of contract, and discrimination. Employers may face financial penalties, compensation claims from affected employees, and damage to their business reputation.

 

How can employers minimise the risk of legal challenges during a TUPE transfer?
Employers can minimise the risk of legal challenges by conducting thorough due diligence, ensuring early and clear communication with employees, engaging in meaningful consultation, following a fair redundancy process, and seeking legal advice to ensure compliance with TUPE regulations.

 

What support should be offered to employees made redundant after a TUPE transfer?
Employers should offer support to employees made redundant, such as outplacement services, career counselling, retraining opportunities, and financial advice. Providing such support helps maintain morale and can reduce the likelihood of disputes or claims.

 

Can employees refuse to transfer under TUPE?
Employees can refuse to transfer under TUPE, but this is treated as a resignation. In such cases, they forfeit their rights to redundancy pay or other dismissal compensation, unless the transfer involves a significant detrimental change to their working conditions.

 

What are the consequences of not properly consulting employees during a TUPE transfer?
Failing to properly consult employees can result in claims for compensation. Employees may be entitled to up to 13 weeks’ pay if their employer fails to inform and consult them appropriately during a TUPE transfer. Additionally, inadequate consultation can lead to legal disputes and damage to employee relations.

 

Section J: Glossary

 

Term	Definition
TUPE (Transfer of Undertakings (Protection of Employment))	A UK regulation that protects employees’ rights when a business or part of a business is transferred to a new employer.
Transferor	The original employer who is transferring the business or service to another employer under TUPE.
Transferee	The new employer who takes over the business or service and its employees under TUPE.
Redundancy	The dismissal of an employee because their role is no longer required, often due to business closure, restructuring, or reduced demand.
Economic, Technical, or Organisational (ETO) Reason	A legitimate reason for making changes to employment terms or redundancies under TUPE, related to business needs.
Collective Consultation	A legal requirement to consult with employee representatives when planning to make 20 or more employees redundant.
Employee Liability Information	Information about the employees transferring under TUPE, including their terms of employment, which must be provided by the transferor to the transferee.
Notice Period	The period an employee must be given before their employment ends, either through redundancy or resignation.
Statutory Redundancy Pay	A payment to which employees with at least two years of service are entitled if they are made redundant.
Constructive Dismissal	When an employee resigns because their employer has fundamentally breached their employment contract, such as by making unilateral changes to terms.
Breach of Contract	A violation of the terms agreed upon in an employment contract, which can lead to legal action.
Unfair Dismissal	A legal claim employees can make if they believe they were dismissed without a fair reason or without following proper procedure.
Redeployment	Offering an employee a different role within the organisation as an alternative to redundancy.
Outplacement Services	Support services provided to employees who are made redundant, including career counselling and job search assistance.

 

Section K: Additional Resources

 

GOV.UK – TUPE: Transfers of Undertakings
https://www.gov.uk/transfers-takeovers
This official government resource provides comprehensive guidance on TUPE regulations, including how they apply, employee rights, and employer responsibilities.

 

ACAS – TUPE Transfers: A Guide for Employers and Employees
https://www.acas.org.uk/tupe
The Advisory, Conciliation and Arbitration Service (ACAS) offers detailed advice on TUPE transfers, focusing on practical guidance for both employers and employees to ensure compliance and fair treatment.

 

CIPD – Managing TUPE Transfers
https://www.cipd.co.uk/knowledge/fundamentals/emp-law/tupe/factsheet
The Chartered Institute of Personnel and Development (CIPD) provides a factsheet with key information on managing TUPE transfers, covering legal obligations and best practices for HR professionals.

 

Health and Safety Executive (HSE) – Managing Workplace Stress
https://www.hse.gov.uk/stress/index.htm
The HSE offers resources on managing workplace stress, including advice on supporting employees during periods of change, such as TUPE transfers and redundancies.