1                 Summary

1.1             TUPE applies to a relevant transfer, which means either or both of:

1.1.1         a transfer of a business or undertaking (or part of a business or undertaking) where there is a transfer of an economic entity that retains its identity (a business transfer);

1.1.2         a service provision change i.e. an outsourcing of services by a client, the in-sourcing of services by a client or a change to the service provider providing services to a client.

1.2             TUPE uses the terms transferor and transferee to describe the original and new employer. On a business sale, the transferor will be the seller and the transferee will be the buyer. On a service provision change, the transferor will be the client or outgoing contractor and the transferee will be the incoming contractor or client.

1.3             Employees assigned to the business or engaged in providing the services will automatically transfer to the transferee on their existing terms and conditions.

1.4             All liabilities in respect of the employees will also transfer to the transferee automatically. This legal effect can be overridden by the contractual documentation so that the transferor agrees to indemnify the transferee for pre-transfer liabilities in respect of the employees.

1.5             There is an obligation on an employer to inform and consult with the representatives of the affected employees¹ in connection with the transfer. This process must take place a reasonable amount of time before completion.  If employee representatives need to be elected before informing and consulting can take place, this should be factored into the transaction timetable.

1.6             There is a legal obligation on the transferee to provide the transferor with information about the measures it intends to take after completion in respect of the transferring employees so that the transferor can comply with its obligation to inform the employee representatives.

1.7             Failure to comply with the duty to inform and consult could result in an employment tribunal making an award of up to 13 weeks’ actual gross pay per employee.

1.8             There is a duty on the transferor to provide the transferee with employee liability information in respect of the transferring employees at least 28 days before completion:  the information required is quite extensive.²

1.9             Any dismissal will be automatically unfair where the sole or principal reason for the dismissal is the transfer. However, where the sole or principal reason for the dismissal is an economic, technical or organisational reason, entailing changes in the workforce (ETO reason), the dismissal will only be potentially unfair.

2                 Legal consequences of TUPE

2.1             TUPE will apply on the transfer of a business (or part of one) situated in the UK or on a service provision change.

2.2             The consequence of this is that TUPE will operate to automatically transfer the contracts of employment of those employees employed by the transferor and assigned to the organised grouping of resources or employees subject to the transfer immediately before the transfer to the transferee.

2.3             Not only do employees’ existing terms and conditions transfer (and these cannot be changed by the transferee after the transfer except in limited circumstances) but, all liabilities (subject to a couple of narrow exceptions) under or in connection with the employment contracts also transfer automatically to the transferee.

2.4             The only exception to the automatic transfer principle is in relation to terms relating to occupational pension schemes: the majority of these do not transfer with the employees.

3                 Pensions

3.1             Despite the carve-out from TUPE for most benefits under occupational pension schemes, legislation gives transferring employees a limited amount of protection for future benefits on a TUPE transfer.

3.2             Where transferring employees had a right to be members of an occupational pension scheme before the transfer, they must be given the opportunity to participate in a pension scheme nominated by the transferee after the transfer. However, such scheme does not have to replicate the pension benefits enjoyed by the employees before the transfer; indeed it does not even have to be the same type of pension scheme.

3.3             The transferee can choose which type of scheme it offers to transferring employees going forward, either: defined contribution (also called money purchase), defined benefit (also called final salary) or stakeholder.  There are certain prescribed conditions with which such schemes must comply.  Specialist advice on pensions should always be taken on any transaction which involves TUPE.

4                 Information and consultation

4.1             There is an obligation on the employer of any “affected employee” to inform their “appropriate representatives”, in writing, of the following issues:

4.1.1         the fact that the relevant transfer is to take place;

4.1.2         when it is (or is proposed) to take place;

4.1.3         the reasons for the transfer;

4.1.4         the legal, economic and social implications of the transfer for the affected employees;

4.1.5         the measures which the transferor envisages it will, in connection with the transfer, take in relation to the affected employees or, if no measures are envisaged, that fact;

4.1.6         the measures which the transferee envisages it will take in relation to those employees who are automatically transferred to it or, if no measures are envisaged, that fact; and

4.1.7         suitable information relating to its use of agency workers. Suitable information means information relating to:

(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             The duty to inform and consult falls on both the transferor and the transferee if they have affected employees. Both employees of the transferor and employees of the transferee may be affected by the transfer. For example, if the transferee will be making changes to the working practices of its existing employees because of the transfer the existing employees will be affected employees and the duty to inform and consult with them will arise.  In addition, the transferee should remember that employees who are not transferring may also be affected by the transfer and, if so, should be informed and consulted with.

4.3             There is an additional duty on an employerto consult with the appropriate representatives where it is envisaged that it will take measures in relation to the affected employees. The consultation must be with a view to seeking an agreement with the employee representatives on the measures to be taken.  The relevant employer must consider any representations made by the representatives and reply to those representations, stating its reasons for any rejection of them.

4.4             For the purposes of the duties to inform and consult, measures would include: a change in location of employment and/or any redundancies proposed and any changes to pension provision. There is a duty on the transferee to give the transferor all the information necessary to enable the transferor to comply with its obligations under TUPE.

4.5             Where informing and consulting obligations are not complied with an employment tribunal may order the employer to pay compensation to affected employees; the maximum award is 13 weeks’ actual gross pay per affected employee. Affected employees may make such a claim even though they remain in employment.

4.6             TUPE provides that the transferee can be jointly and severally liable with the transferor for a failure to inform and consult.  In a commercial context, the transferee can protect its position by use of an appropriate indemnity in the contractual documentation.

4.7             Information and consultation obligations also arise, with the same need to appoint appropriate representatives, where collective redundancies are envisaged.

5                 Who are appropriate representatives?

5.1             Where there is a recognised independent trade union which represents the affected employees then the appropriate representatives would be the representatives of that union and the employer must consult with them regardless of whether all the affected employees are trade union members. In other cases, the employer may consult representatives elected by the affected employees specifically for TUPE purposes. Alternatively, they may choose to consult existing employee representatives who have the authority to receive the information and be consulted on behalf of affected employees (so this would not include social representatives).

5.2             If the employer invites affected employees to elect representatives and they fail to do so within a reasonable time, then it is obliged to give each affected employee the prescribed information individually.

5.3             However, if the employer employs fewer than 50 employees or if the transfer involves fewer than ten employees, there are no existing appropriate representatives and the employer has not invited any of the affected employees to elect employee representatives, then the employer can inform and consult with the affected employees individually.

6                 When should the information be given?

The relevant information about the transfer must be given to the appropriate representatives long enough before the relevant transfer to enable consultation to take place. There is no clear guidance in TUPE or case law as to what this means exactly. Timing may be influenced by the number of measures envisaged. For example, where redundancies or relocation is proposed it is likely that extensive information will need to be given at an early stage to enable meaningful consultation to take place.

7                 Dismissal of employees

7.1             Any employee dismissed by the transferor or the transferee before or after the relevant transfer, where the sole or principal reason is the transfer, will be treated as automatically unfairly dismissed. Where the reason for the dismissal is an economic, technical or organisational (ETO) reason the dismissal will be potentially unfair.

7.2             A finding of unfair dismissal results in a liability for a basic award based on age, pay and length of service and a compensatory award.  The limit of the basic award is increased each year in line with inflation. Since 1 January 2027, the compensatory award is uncapped.

7.3             Liability for the unfair dismissal in these circumstances may well pass to the transferee even if the dismissal is by the transferor provided it can be shown that the individual’s employment would have transferred to the transferee automatically with the business but for the unfair dismissal.  Liability for dismissal after the transfer is of course with the transferee.

7.4             The only exception to this is where the dismissal can be shown to be for an ETO reason. If it can be, this means that the dismissal is potentially fair but it will still be for the employer to show that the dismissal was for a fair reason and was fair in all the circumstances (i.e. a correct procedure was followed).

7.5             Where a potential transferee requests certain employees are dismissed this is likely to be automatically unfair. Only a genuine redundancy situation (see below) is likely to qualify as an ETO reason.

8                 Employee liability information

8.1             At least 28 days before the transfer a transferor must provide the transferee with employee liability information (unless there are special circumstances which render this not reasonably practicable, in which case the information must be provided as soon as possible thereafter).

8.2             Any change to the employee liability information once it has been exchanged must be notified in writing.

8.3             The employee liability information which must be provided is specified in TUPE and set out in the Appendix to this note.

8.4             Where a transferor has failed to comply with its obligations to provide employee liability information under TUPE a transferee may bring a claim against the transferor in the employment tribunal within three months of the relevant transfer.

8.5             The employment tribunal may order the transferor to pay compensation to the transferee.  In deciding the amount of compensation to be awarded the tribunal shall have regard to:

8.5.1         the loss sustained by the transferee because of the transferor’s breach of duty; and

8.5.2         any contractual terms agreed between the parties under which the transferor may be liable to pay a sum to the transferee in respect of the failure to notify employee liability information.

8.6             The transferee is bound by the normal common law duty to mitigate its loss as a result of the transferor’s breach. Subject to this a tribunal must award at least £500 per employee in respect of whom the transferor failed to provide information. A tribunal has the discretion to award a lesser sum if it considers it just and equitable to do so.

9                 Redundancy

9.1             An employee will be redundant in three scenarios: a) when an employer ceases to carry on the business in which the employee was employed; b) when the employer moves the location of its business in which the employee was employed; or c) when the employer’s need for the employee to carry out work of a particular kind ceases or diminishes or is expected to cease or diminish.

9.2             Where 20 or more employees are to be dismissed at one establishment within a period of 90 days³, there are separate, collective consultation obligations (in addition to those under TUPE) which must be complied with and notification must also be given to the Secretary of State.  A period of 30 days consultation prior to any dismissals taking effect is required where there are between 20 and 99 redundancies; 45 days if the redundancies exceed 99 within the 90 day period.

9.3             It is possible for a transferee who is proposing redundancies following a transfer under TUPE to consult or start consulting in accordance with their collective consultation obligations before the transfer takes place provided certain requirements are met. In particular, the transferee must agree to the consultation taking place pre transfer, and the transferor must give written notice to the transferee of its intention to enter into pre transfer consultation.

9.4             Where a transferee has given written notice and started consultation but then decides to cancel the pre transfer consultation, the transferee must give written notice to the transferor, appropriate representatives, transferring employees and BIS of its decision and this will void any consultation which has taken place so that the transferee would have to start from scratch if it then proposed any redundancies. Once cancelled, the transferor cannot make a further election to start consultation pre transfer.

9.5             Even where there is no collective consultation requirement, in order to satisfy the requirement for the dismissal to be fair, an employer should consult at an individual level with the employee.  They should give as much notice as possible of the impending redundancy to the employee and seek suggestions from the employee for avoiding the redundancy.  An employer should make all possible efforts to redeploy the employee to other parts of the business or to offer a suitable alternative position either within the company or its associated companies to help establish that the dismissal was procedurally fair.

This guidance note is intended to provide a brief summary and general guidance only.  It should not be used as a substitute for specific advice about your particular circumstances: specialist advice should always be sought.

Appendix 1
Employee Liability Information

Information to be provided by the transferor to the transferee:

• the identity of employees who will transfer;
• the age of those employees;
• information contained in the statement of employment particulars of those employees;
• information about any collective agreements which will transfer with the employees;
• information on any disciplinary procedure taken against an employee and any grievance procedure taken by an employee in the previous two years in circumstances where the ACAS Code applied; and
• information on any legal proceedings taken by an employee against the transferor in the previous two years and which the transferor has reasonable grounds to believe an employee may bring against the transferee, arising out of their employment with the transferor;
• information on any collective agreements affecting those employees which will still have effect after the transfer.

A statement of employment particulars must contain the information set out in section 1 of the Employment Rights Act 1996:

• the names of the employee and employer;
• the date when employment began and, if different, the date on which the employee’s period of continuous employment began;
• the salary;
• the intervals at which the salary is paid;
• any terms and conditions relating to hours or work including normal working hours, the days of the week the employee is required to work and whether or not such hours or days may vary, and if so how they vary;
• any terms and conditions relating to holiday entitlement and holiday pay;
• any terms and conditions relating incapacity for work due to sickness or injury and any provision for sick pay;
• any terms and conditions relating to any other paid leave;
• any terms and conditions relating to pensions and pension schemes;
• any other benefits provided by the employer;
• the length of notice each party must give;
• the employee’s job title or brief description of their work;
• the place of work;
• where the employee is not permanent the date on which employment is expected to end;
• any probationary period, including any conditions and its duration;
• any collective agreements which directly affect the terms and conditions of the employee;
• any training entitlement provided by the employer, any part of that training which the employer requires the employee to complete and any other training which the employer requires the employee to complete and which the employer will not pay for;
• any disciplinary rules applicable to the employee and any disciplinary and dismissal procedure which applies to the employee;
• any grievance procedure which applies to the employee; and
• nowhere the employee works outside the UK for more than one month: the duration of their posting, the currency in which they will be paid, any terms and conditions relating to their return to the UK and details of any additional benefits to which they are entitled by reason of working outside the UK.

¹          Note that “affected employees” may include not only the employees of the transferor who are in scope to transfer, but also employees of the transferor who are not transferring and employees of the transferee who will be affected by the transfer.

²        Note that there is an exception to this requirement for micro businesses discussed at section 5 of this briefing note.

³           The Employment Rights Act 2025 provides for an additional trigger based on redundancies across the entire workforce. Further details are awaited.