Glossary · UK
What is TUPE (Transfer of Undertakings Protection of Employment)?
UK employment law rules that automatically transfer employees, their contracts, and most terms and conditions to a new employer when a business, part of a business, or a service contract changes hands.
Full Definition
TUPE, short for the Transfer of Undertakings (Protection of Employment) Regulations 2006, protects employees when the business or organisation they work for changes ownership, or when a service they work on is outsourced, brought in-house, or moved to a new contractor. Where TUPE applies, affected employees automatically transfer to the new employer (the "transferee") on their existing terms and conditions, continuity of employment is preserved as if there had been no break in service, and the new employer inherits liability for most existing employment claims. TUPE covers two main scenarios: a "business transfer", where an entire business or a distinct part of it is sold or transferred, and a "service provision change", where a contracted-out service (such as cleaning, catering, or payroll processing) moves from one contractor to another, or is brought back in-house by the client. Both outgoing and incoming employers have information and consultation duties under TUPE. The outgoing employer must provide "employee liability information" to the new employer at least 28 days before the transfer, covering identity, contractual terms, disciplinary and grievance history, and any collective agreements. Both employers must inform, and where measures are envisaged, consult with affected employees or their representatives (a recognised union, or elected employee representatives) about the transfer and its implications. Dismissing an employee solely because of a TUPE transfer is automatically unfair, unless the employer can show an economic, technical, or organisational (ETO) reason entailing changes in the workforce, such as a genuine redundancy caused by restructuring after the transfer. Terms and conditions transferred under TUPE generally cannot be changed by the new employer if the sole or principal reason for the change is the transfer itself, even with the employee's agreement, except where an ETO reason applies or where the contract already allowed for the change independently of the transfer. Pension rights are only partially protected: TUPE does not require the new employer to replicate a final salary or other generous occupational pension scheme, though a minimum level of matched employer pension contribution must usually be offered. Employees who object to transferring can resign, but this is treated as a resignation rather than a dismissal, meaning no redundancy pay or unfair dismissal claim normally arises from the objection itself.