The employer’s ultimate guide to TUPE

According to the Office for National Statistics (ONS), there were 1,779 domestic and cross-border Mergers and acquisitions (M&A) transactions in the UK in 2024.

Mergers and acquisitions (M&A) are transactions where businesses buy out other organisations and consolidate assets. These are often critical for growth, helping firms acquire additional tech, talent and other resources in a bid to increase market share and profit or offer a more efficient service. M&As are common across the globe—think Elon Musk’s high-profile acquisition of Twitter in 2022—but they are a key fixture of UK business, too.

But M&A can also cause significant workforce disruptions and increase employee anxiety. When Musk acquired Twitter in 2022, for example, he terminated more than 6,000 employees—almost half its workforce—and failed to honor severance and benefits packages. While some of these employees had recourse, it took years.

TUPE is a vital set of regulations designed to protect employees when a business changes hands in the UK. While the company can be global, protections apply if the branch or office affected is in the UK. TUPE makes sure that staff are transferred to the new employer under the same terms and conditions, preventing unfair dismissal or changes to contracts. For employers, it might seem like a complex process—but it’s important to get to grips with it, as you could be fined up to 13 weeks’ gross pay per employee affected for not following the procedure.

Keep reading for everything you need to know about the ins, outs, regulations, and meanings of TUPE in more detail.

What is TUPE?

TUPE stands for Transfer of Undertakings (Protection of Employment). It applies to employees of businesses in the UK that have changed ownership, protecting their rights during the transfer over to the new company.

M&A transactions have the potential to be highly disruptive to employees. TUPE was established in 1981 so that workers’ rights, terms and conditions are transferred and adhered to as they change employers, and the regulations have been through several amendments since.

When does TUPE apply?

TUPE applies to the employees of businesses in the UK, regardless of the size of the company or where its head office is located. It covers employees’ jobs that are transferring to a new company, with potential exceptions for redundancy or business insolvency.

It applies to two different types of transfer:

Service provision changes

A service provision change is when a service is transferred to a new provider. This could be when an in-house service, like catering or cleaning, is outsourced to a contractor. Here, any employees who can clearly be identified as the service provider—the in-house cleaner or caterer, using the example above—would be protected by TUPE.

Business transfers

This is where a business—or part of one—moves from one owner or employer to another. This can include situations where two companies merge to become an entirely new one, or when a given business acquires another under its banner.

What does an employer need to do under TUPE?

Both incoming and outgoing employers have several significant legal responsibilities to their employees in the TUPE process. Let’s go through them in more detail:

Transfer employment terms and conditions

As a new employer (transferee), your key obligation under TUPE is to maintain the existing terms and conditions of the transferring employees.

This includes:

• pay
• working hours
• holiday entitlement
• benefits

Making any unilateral changes to these elements of the contract could put you in breach of TUPE.

Consult and inform employees

Both incoming and outgoing employees are required to inform affected employees and/or their representatives to ensure transparency, covering:

• that the transfer is taking place
• the reasons for it
• the date of the transfer
• any legal, social, or economic ramifications for the employers (such as changes to job titles).

If there are any ‘measures’, or changes to the workforce (such as redundancies) then the employers must tell affected employees and their representatives in advance. This should be a meaningful consultation—allowing a dialogue and a chance for those affected to raise concerns or ask questions. Employers must engage with employees or recognised trade unions. If there is no recognised trade union, employers must arrange for the election of employee representatives. They must present their information in writing and allow adequate time for the consultation process.

Employee liability information (ELI)

Outgoing employers must provide their successor employers with specific employee liability information at least 28 days in advance of the transfer. This can include everything from the identities of the transferred employees, their terms, and any ongoing grievances, issues or disciplinaries. This helps the new employers prepare.

Protection against dismissal

It’s also important to note that employees can’t be dismissed simply because of the transfer. These dismissals will be considered unfair, unless they are for economic, technical or organisational reasons that necessarily entail changes to the workforce.

What is the TUPE transfer process?

TUPE requirements pre-transfer

Firstly, employers should itemise which part(s) of the business are being transferred, and who will be affected.

This information should be shared between the outgoing and incoming employers up to 28 days in advance—including details on employee contracts, employment terms, disciplinary records, and any other need-to-know details.

After this stage, employee consultation begins—where employers provide details, dates, reasons, and impacts with the employees.

Both employers should coordinate this transfer, handing over responsibilities, comms strategies and any other changes to operations.

TUPE requirements mid-transfer

When the transfer date rolls around, affected employees’ contracts, rights, and obligations will automatically move to their new employer. The secure transfer of this data is essential, as is compliance with data protection laws, and safe handling of personal records, contracts, and other sensitive information.

TUPE requirements post-transfer

After the transfer, the incoming employer should focus on integration—helping the transferred employees find their place in the new organisation. This could involve onboarding, training, and anything else they need to get started. Any further changes to terms and conditions that might happen down the line should be handled carefully to avoid issues with TUPE.