TUPE

Also called Transfer of Undertakings, Business transfer, Service provision change

Rules that move employees automatically to a new employer when a business or a contract changes hands.

What it means

TUPE transfers employees, with their existing terms and continuous service, to a new employer when a business or part of one is transferred, or when a service provision changes — outsourcing, insourcing, or a contract moving between providers.

Dismissals for a reason connected to the transfer are automatically unfair unless there is an economic, technical or organisational reason entailing changes in the workforce.

Why it matters

It catches transactions people do not think of as transfers: winning a cleaning contract, taking a service back in-house, buying the assets of a business.

The liabilities transfer too — outstanding holiday, unpaid wages, existing claims — which is why it belongs in due diligence.

What it looks like in practice

Both employers must inform, and where measures are envisaged consult, appropriate representatives. Failure carries an award of up to thirteen weeks' pay per affected employee.

The outgoing employer must provide employee liability information within a set period before the transfer.

Changing terms after a transfer to harmonise with existing staff is generally void if the reason is the transfer, however sensible it seems.

What to watch out for

Assuming an asset purchase avoids it. It usually does not.

Share sales, which do not trigger TUPE because the employer does not change — a genuine structural difference between a share and an asset purchase.

Where to get proper advice

ACAS publishes a detailed guide. For any real transaction, an employment solicitor — TUPE is technical and the penalties are per employee.