1 Introduction
1.1 The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) apply where there is a transfer of an undertaking for example, on the sale of a business and where there is a service provision change for example, on the outsourcing of services to a, or change of, contractor. For the purposes of this note both scenarios are referred to collectively as a “relevant transfer”.
1.2 In this note the seller of a business or the entity which is outsourcing its services is referred to as the “transferor” and the buyer of the business or incoming contractor as the “transferee”.
1.3 TUPE imposes certain obligations on an employer of affected employees prior to a relevant transfer. This note looks at two of those obligations: informing and consulting with the representatives of affected employees.
1.4 The obligation to inform arises every time there is a relevant transfer. The obligation to consult will only arise where it is envisaged that “measures” will be taken in connection with the relevant transfer.
1.5 The obligations to inform and consult falls on both the transferor and the transferee (if it has employees who will be affected by the transfer). For example, new working practices may be introduced because of the transferring employees becoming employed by the transferee. Existing employees employed by the transferee will therefore be affected by the transfer.
1.6 There are significant financial penalties: 13 weeks’ actual pay per affected employee, where an employer fails to comply with its informing and consulting obligations under TUPE.
1.7 While there is no timetable set out in the legislation for providing information to employee representatives this must be given long enough before a relevant transfer to enable meaningful consultation to take place. For these purposes “transfer” means completion of the transaction so informing and consulting may take place in any gap between signing and completion.
1.8 Ideally the process of informing and consulting should start as soon as it becomes apparent that a relevant transfer is likely to take place. While employers may be reluctant to begin the process too early because of confidentiality and commercial issues these are not by themselves justifiable reasons not to inform and consult.
1.9 Where there are no measures to be taken in connection with the relevant transfer then a shorter period will be justifiable. However, where there are significant changes proposed because of the relevant transfer a period of at least 4 weeks consultation is advisable (but additional time will need to be factored in where representatives need to be elected).
2 Who should be informed and consulted?
2.1 The employer must inform and consult with either:
2.1.1 representatives of any trade union recognised for collective bargaining purposes, or, where there is no such trade union;
2.1.2 with any pre-existing employee representatives who are authorised to receive information about the relevant transfer (social committee representatives will not be so authorised); or
2.1.3 new employee representatives specifically elected for TUPE purposes.
2.2 If representatives are to be specially elected, then the employer must ensure that certain election conditions prescribed by legislation are met (see Appendix).
2.3 Only where employees have been given the opportunity to elect employee representatives and have failed to do so may information be given to the employees individually.
2.4 However, if the employer employs fewer than 50 employees or if the transfer involves fewer than ten employees, there are no existing appropriate representatives already in place and the employer has not invited the affected employees to elect employee representatives, then the employer can inform and consult with the affected employees individually.
3 Who are the affected employees?
Affected employees are employees of both the transferor or the transferee who may be affected by the relevant transfer or any measures taken as a result. Obviously, those employees who are transferring will be “affected”. However, “affected” employees will also include any employees of the transferor or transferee who, although not transferring, will experience changes in their terms and conditions or working conditions.
4 What information are employee representatives entitled to?
4.1 The employer must notify the employee representatives in writing of:
4.1.1 the fact that the transfer is to take place, the timing of the transfer and the reasons for it;
4.1.2 the legal, social and economic implications of the transfer for the affected employees (this will include any changes to pensions);
4.1.3 the measures which the transferor envisages taking in connection with the transfer in relation to its employees and if there are no such measures, that fact;
4.1.4 if the employer is the transferor, the measures which it envisages the transferee will take in connection with the transfer in relation to those affected employees who will transfer under TUPE or if there are no such measures, that fact.
4.1.5 Suitable information relating to the use of agency workers, including:
a) the number of agency workers working temporarily for and under the supervision and direction of the employer.
b) The parts of the employer's undertaking in which those agency workers are working.
c) The type of work those agency workers are carrying out.
The information to be given extends to all agency workers engaged by the employer not just those engaged in the part of the undertaking being sold or working on the services being transferred.
4.2 Where no measures are envisaged the employer’s obligations cease once this information is provided. Where measures are envisaged by the employer then the additional obligation to consult arises.
4.3 The transferee employer is under a duty to provide the transferor with details of its intended measures in good time to enable the transferor to comply with its informing obligations.
5 What should consultation include?
5.1 Consultation should be conducted with a view to seeking the agreement of the employee representatives on the measures to be taken. The legislation does not actually require agreement to be reached, but the employer must consult in good faith with a view to reaching an agreement if possible. The employer must consider any representations made by the representatives and reply to those representations. If the employer rejects any representations they must give reasons.
5.2 Broadly speaking measures include any changes to terms and conditions or working conditions e.g. different bonus schemes or shift patterns and this would include any changes to pension benefits and/or dismissals or redundancies which may be made because of the transfer.
5.3 Note that if 20 or more redundancies are proposed a separate obligation to consult collectively under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 will arise.1
6 What rights do the employee representatives have?
6.1 The employee representatives are elected to represent all the employees who will be affected by the transfer (i.e. not just those actually transferring) in discussions with the employer. Representatives have certain rights to enable them to actively participate in the consultation process without fear of redress. These rights include:
6.1.1 protection against unfair dismissal and other detrimental treatment in relation to their participation in elections or their status or activities as elected representatives;
6.1.2 reasonable access to their constituent employees and to such accommodation and other facilities e.g. use of telephones, as is appropriate;
6.1.3 reasonable time off with pay during normal working hours to perform their functions and undertake appropriate training in aspects of industrial relations relevant to the carrying out of duties as an employee representative; and
6.1.4 redress in the employment tribunal if the rights described above are infringed.
7 What are the consequences of failure to collectively consult?
7.1 If the employer:
7.1.1 fails to meet the requirement to inform and consult during the required period; or
7.1.2 fails to meet the conditions dealing with election of employee representatives;
an affected employee or employees may complain to an employment tribunal. Note that employees do not have to have been dismissed to bring such a claim.
7.2 A complaint relating to a failure by the employer relating to employee representatives may also be brought in the employment tribunal by the representative to whom the failure relates. It must be brought within six months of the relevant transfer.
7.3 Where a complaint is found to be justified, the employment tribunal will make a declaration to that effect and will also make a “protective award” of up to 13 weeks’ gross pay per affected employee. The protective award is intended to be punitive and have a deterrent effect. Therefore, unless there are significant mitigating circumstances an Employment Tribunal will generally make the maximum protective award.
7.4 Under TUPE, liability for failure to inform and consult is joint and several as between the transferor and transferee.
This guidance note is intended to provide a brief summary and general guidance only and should not be used as a substitute for specific advice about your particular circumstances: specialist advice should always be sought.
APPENDIX
1 Election requirements for employee representatives
1.1 The rules are:
1.1.1 the employer shall make such arrangements as are reasonably practicable to ensure that the election is fair;
1.1.2 the employer shall determine the number of representatives to be elected so that there are sufficient representatives to represent the interests of all the affected employees, having regard to the number and classes of those employees;
1.1.3 the employer shall determine whether the affected employees should be represented either by representatives of all the affected employees or by representatives of particular classes of those employees;
1.1.4 before the election the employer shall determine the term of office of employee representatives so that it is of sufficient length to enable relevant information to be given and consultations to be completed;
1.1.5 the candidates for election as employee representatives are affected employees on the date of the election;
1.1.6 no affected employee should be unreasonably excluded from standing for election;
1.1.7 all affected employees on the date of the election are entitled to vote for employee representatives;
1.1.8 the employees entitled to vote may vote for as many candidates as there are representatives to be elected to represent them; or, if there are to be representatives for particular classes of employees, for as many candidates as there are representatives to be elected to represent their particular class of employee;
1.1.9 the election must be conducted so as to ensure that:
1.1.10 so far as is reasonably practicable, those voting do so in secret; and
1.1.11 the votes given at the election are accurately counted.
1.2 Where an employee representative is elected in accordance with these rules but subsequently ceases to act as such and, in consequence, certain employees are no longer represented, another election should be held satisfying the rules set out above.
1 The Employment Rights Act 2025 also provides for an additional trigger to be introduced based on redundancies across the whole organisation. Further details of this trigger are awaited.