TUPE and Business Re-organisations

TUPE, which stands for the Transfer of Undertakings (Protection of Employment), is a set of UK employment regulations that employers must consider whenever a business, part of a business or a service changes hands. It most commonly arises during business reorganisations, mergers and acquisitions, outsourcing arrangements and changes to service providers.

For employers, TUPE affects how they transfer staff, which employment rights move with them, and how far changes to roles, terms and workforce structure can lawfully be made. While TUPE is often viewed as restrictive, it is a well-established legal framework that can be managed with careful planning and early legal advice. The employment law solicitors at Clough & Willis regularly advise employers on TUPE as part of wider business reorganisations, and help them to reduce risk and avoid employment tribunal claims.

Contact us today to discuss how we can help your business navigate TUPE. Call us on 0800 083 0815, or fill in our online enquiry form to arrange for a call back at your convenience.

How Can Clough & Willis Help?

Clough & Willis advises employers at every stage of the business transfer process, from assessing whether TUPE applies to handling post-transfer workforce changes. Our role is to help businesses comply with the TUPE regulations while maintaining commercial control and minimising disruption.

Our wider employment law and HR services experience covers a wide range of issues, including:

• Discrimination
• Dismissal Procedures
• Employee Benefits and Incentive Packages
• Employer's Advantage - Managed HR Solutions
• Employment Contracts & Service Agreements
• Employment Tribunals
• Redundancies
• Restrictive Covenants
• Settlement Agreements
• Sexual Harassment
• Core Protection from Clough & Willis

We provide clear advice on TUPE applicability, employee transfers, consultation requirements and potential exposure to unfair dismissal or failure-to-consult claims. Where TUPE arises as part of a wider reorganisation, we work alongside employers to align legal compliance with commercial objectives and operational timelines.

What TUPE Means in Practice for Employers

In practical terms, TUPE is designed to preserve continuity of employment when a relevant transfer takes place. Where TUPE applies, employees assigned to the transferring business or service automatically move to the new employer on their existing terms and conditions.

For employers, this means that contracts of employment, continuity of service and most employment rights transfer by operation of law. Liabilities connected to those employees, including potential legal claims, also move across. TUPE does not prevent reorganisation, but it regulates how change can be implemented and limits the circumstances in which dismissals or contractual changes can lawfully be made.

Having access to legal expertise that fully understands how TUPE operates in practice is essential when planning any form of business reorganisation involving staff.

When TUPE Applies

TUPE applies where there is a relevant transfer. This can arise in two main situations:

1. A business transfer, such as an asset sale where a business or part of a business is transferred to another owner and retains its identity after the transfer.
2. Service provision change, which includes outsourcing, bringing services back in-house or transferring services between contractors.

In service provision changes, TUPE will usually apply where there is an organised grouping of employees whose principal purpose is to carry out the activities that are transferring. Each case depends on its specific facts, and incorrect assumptions about whether TUPE applies can expose employers to unnecessary risk.

When TUPE Does Not Apply

There are situations where TUPE does not apply, and identifying these correctly is just as important. TUPE does not apply to share-only sales, as the employer remains the same legal entity. It also does not apply to the pure supply of goods, or to short-term or one-off service arrangements.

Where there is no organised grouping of employees dedicated to the activities transferring, TUPE may also be excluded. These distinctions are often fact-sensitive, and misjudging whether TUPE applies can lead to claims for unfair dismissal or failure to consult. You should speak with the experienced employment law team at Clough and Willis to make sure you fully understand what is required to confirm TUPE status.

Informing and Consulting Employees Under TUPE

TUPE places a clear obligation on employers to inform and, in some cases, consult with affected employees before a transfer takes place. Information must be provided about the fact of the transfer, the timing, the reasons for it and the legal, economic and social implications for employees.

Where measures are proposed in connection with the transfer, consultation must take place with a view to reaching agreement. Failure to comply with these obligations can result in protective awards of up to 13 weeks’ gross pay per affected employee, making this one of the most significant risk areas for employers during a merger, acquisition or reorganisation.

Dismissals and Workforce Changes Following a TUPE Transfer

Dismissals where the sole or principal reason is the TUPE transfer itself are automatically considered unfair. This applies whether the dismissal takes place before or after the transfer.

Dismissals may only be lawful where there is an economic, technical or organisational (ETO) reason that changes in the workforce are required. These ETO reasons are interpreted narrowly by tribunals, and reliance on them requires careful legal analysis. Workforce changes, redundancies and restructures following a TUPE transfer therefore need to be handled with particular care to avoid unfair dismissal claims.

How Long After a TUPE Transfer Can Employment Contracts Be Changed?

There is a common misconception that employment contracts can be changed once a certain period has passed after a TUPE transfer. In reality, the passage of time alone does not make changes lawful.

Any variation to employment terms will be void if the sole or principal reason for the change is the transfer itself. Changes may only be lawful where they are genuinely unconnected to the transfer or are supported by a valid ETO reason and agreed properly. Mishandling post-transfer changes is a frequent cause of employment tribunal claims, which is why legal advice is recommended before implementing variations.

How Long Do TUPE Protections Last?

TUPE protections do not expire automatically. Employees retain their continuity of employment and transferred rights indefinitely unless and until lawful changes are made. This means that TUPE can have long-term implications for workforce planning, redundancy exercises and future restructures.

Employers should treat TUPE as an ongoing consideration rather than a short-term compliance exercise limited to the transfer date.

Can an Employee Refuse a Transfer and Take Redundancy?

Employees have the right to object to transferring under TUPE. Where an employee refuses to transfer, their employment will usually terminate at the point of transfer. However, this does not give the employee an automatic right to redundancy pay or compensation.

From an employer’s perspective, objections can create uncertainty and require careful handling. Legal advice will allow you to fully understand the consequences of objections and manage the risk of associated claims.