Transfers of undertakings (Protection of Employment) Regulations (‘TUPE’)

Frequently Asked Questions

• What is TUPE?

  TUPE protects employees in the event of a relevant transfer. There are two types of relevant transfer under TUPE:

  • a business transfer; and
  • a service provision charge.
• What is the effect of TUPE?

  On the transfer of a business the contracts of employment of the employees employed within the business are automatically transferred to the new owner provided that:

  • the business is situated in the UK;
  • the business retains its identity after the transfer; and
  • the relevant employees are employed immediately before the transfer.

  Employees who do not want to be transferred will have their employment terminated, but it won’t amount to a dismissal.

  An employer may not vary any terms of its employees’ contracts where the sole reason is the transfer.

• What obligations does the former employer have?

  There is an obligation to ensure that a proper consultation process is held with employees as to the fact of, reasons for and consequences of the transaction. A failure to do so can result in large financial penalties for both the old and new employers of up to 13 weeks’ pay per employee. 

• What obligations transfer to the new employer?

  The new employer will acquire all rights and liabilities associated with the employees and their contracts apart from criminal liabilities and certain rights and liabilities associated with occupational pension schemes.