TUPE Transfers: Protected Terms and ETO Reasons

When a business, or a service contract such as an outsourced function, transfers to a new employer, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) automatically move affected employees across on their existing terms, with continuity of employment preserved.

What Is TUPE and When Does It Apply

TUPE, the Transfer of Undertakings (Protection of Employment) Regulations 2006, protects employees when the business or organisation they work for changes hands. It covers two distinct situations. A business transfer is the sale, merger, or other transfer of a business, or a distinct part of one, as a going concern, so that it continues to operate under new ownership. A service provision change covers outsourcing (a service moves from an in-house team to a contractor), insourcing (a service moves back in-house), and re-tendering (a contract moves from one contractor to another). In both situations, the identity of the employer changes but the underlying work, and the employees doing it, generally carry on much as before. TUPE exists so that a change of employer, on its own, does not strip employees of the job security and terms they had built up.

What Transfers Automatically to the New Employer

Where TUPE applies, affected employees do not need to resign, reapply, or agree new contracts. Their employment transfers automatically to the incoming employer by operation of law, on the same terms they had immediately before the transfer.

Continuity of employment matters well beyond the transfer date itself. It is what an employee later relies on to show they have enough service to qualify for statutory redundancy pay or to bring an unfair dismissal claim, so a TUPE transfer does not reset that clock.

Changing Terms After a TUPE Transfer

A new employer cannot use the transfer as an opportunity to worsen an employee's terms. Any variation to a transferred employee's contract is generally void where the sole or principal reason for it is the transfer itself, even if the employee appears to consent at the time. This protection is not absolute. A change made for an ETO reason, or one that would have happened regardless of the transfer, can stand. Because the void rule is easy to get wrong in practice, an employer wanting to harmonise terms after a transfer should take advice before making changes, rather than assuming employee agreement is enough to make a transfer-related change lawful.

Dismissals Because of a TUPE Transfer

A dismissal is automatically unfair if the transfer itself is the sole or principal reason for it, whether the dismissal happens before or after the transfer takes place. This protects employees from being dismissed simply to avoid them transferring, or shortly after transferring, because the new employer would rather not take them on.

There is one recognised exception. A dismissal connected to the transfer can still be fair if the employer can show it is for an ETO reason, an economic, technical or organisational reason entailing changes in the workforce.

Even where an ETO reason exists, the employer must still follow a fair process, and a dismissal for an ETO reason is treated as a redundancy where the legal definition of redundancy is met, and otherwise as a dismissal for "some other substantial reason". Where it is a redundancy, the usual requirements around selection and consultation apply.

Information and Consultation Duties

Both the outgoing and incoming employer have a duty to inform appropriate representatives of any employees affected by the transfer, whether or not those employees actually move employer. Appropriate representatives are either existing trade union representatives, where a union is recognised, or elected employee representatives. The employers must give information covering the fact of the transfer, when and why it is happening, its legal, economic, and social implications for affected employees, and any measures the employers envisage taking in connection with the transfer. Where either employer envisages measures affecting employees, it must also consult those representatives, with a view to seeking their agreement, and consider and respond to anything they raise. Skipping or rushing this process is a common source of tribunal claims following a transfer.

Employee Liability Information

Before the transfer, the outgoing employer must give the incoming employer Employee Liability Information about each employee who is due to transfer. This lets the new employer understand what it is taking on. It generally covers matters such as the employee's identity and age, the particulars of employment the employee is entitled to, details of any relevant disciplinary or grievance history, and information about any existing legal proceedings brought by, or that could be brought by, the employee. Getting this information late, or getting it wrong, does not stop the transfer or the automatic transfer of employees, but it can lead to a separate claim by the incoming employer against the outgoing one.

Northern Ireland

TUPE 2006 covers business transfers throughout the United Kingdom, including Northern Ireland. Service provision changes (outsourcing, insourcing and re-tendering) are different: the TUPE rule covers only a group of employees situated in Great Britain, and in Northern Ireland they are covered by the separate Service Provision Change (Protection of Employment) Regulations (Northern Ireland) 2006. Some amendments made in Great Britain in 2014, such as the rule that a change in the place of work can count as an ETO reason, do not apply in Northern Ireland, so check the Northern Ireland text for an NI transfer. Disputes about a TUPE transfer in Northern Ireland go to the Industrial Tribunal rather than the Employment Tribunal used in Great Britain, and advice and early conciliation are provided by the Labour Relations Agency (LRA), which plays the role ACAS has in Great Britain.

If a TUPE transfer ends in dismissal or a disputed exit, related guides cover unfair dismissal, redundancy pay, and settlement agreements. For the full picture of UK employment rights, see the UK Employment Law hub and the United Kingdom hub.

This article provides general information about TUPE transfers in the UK, with the Northern Ireland differences noted above, and is not legal advice. Whether TUPE applies to a particular transfer, and whether a dismissal or contract change is lawful, depends on the individual facts, so anyone facing a transfer should check their position with ACAS, Citizens Advice, or a solicitor.

Frequently Asked Questions

What is TUPE in simple terms?

TUPE is UK law that automatically moves employees to a new employer, on their existing terms and with continuity of employment preserved, when the business they work for is sold or when a service they work on is outsourced, insourced, or re-tendered to a new contractor.

Do I automatically keep my job if my employer's contract is outsourced?

Generally yes. A service provision change, such as outsourcing, insourcing, or re-tendering a contract, is one of the two situations TUPE covers, and employees assigned to that service normally transfer automatically to the new provider on their existing terms.

Can a new employer change my contract after a TUPE transfer?

Not simply because of the transfer. A change to a transferred employee's terms and conditions is generally void where the transfer is the sole or principal reason for it, unless the employer can show an ETO reason or that the change would have happened regardless of the transfer.

Can I be dismissed because of a TUPE transfer?

A dismissal where the transfer is the sole or principal reason is automatically unfair. An employer can still fairly dismiss for an economic, technical or organisational (ETO) reason entailing changes in the workforce, but must follow a fair process, similar to a redundancy dismissal.

What is an ETO reason under TUPE?

An ETO reason is an economic, technical or organisational reason entailing changes in the workforce. Economic reasons relate to the business's profitability or costs, technical reasons relate to equipment or processes, and organisational reasons relate to management or staffing structure.

Does my length of service reset when I transfer under TUPE?

No. Continuity of employment is specifically preserved by TUPE, so an employee's length of service carries over to the new employer as if they had always worked there, which matters for later redundancy pay and unfair dismissal claims.

What is Employee Liability Information?

It is information the outgoing employer must give the incoming employer before a TUPE transfer, covering each transferring employee's basic particulars of employment, relevant disciplinary or grievance history, and details of any actual or potential legal claims.

Does TUPE apply in Northern Ireland?

Yes. TUPE 2006 covers business transfers in Northern Ireland, and service provision changes there are covered by the separate Service Provision Change (Protection of Employment) Regulations (Northern Ireland) 2006. Disputes are heard by the Industrial Tribunal rather than the Employment Tribunal, and the Labour Relations Agency (LRA) provides advice and conciliation, the role ACAS plays in Great Britain.