Employment Law

TUPE — What Happens to Your Job When a Business Is Sold (2025 Guide)

26 May 2025 ⏱ 11 min read 🇬🇧 England & Wales Last reviewed: May 2025

When a business is sold or a contract is outsourced, employees can find themselves facing uncertainty about whether they still have a job and on what terms. TUPE — the Transfer of Undertakings (Protection of Employment) Regulations 2006 — provides vital protections in these situations: your job transfers automatically, your existing terms and conditions are preserved, and dismissal connected to the transfer is automatically unfair. This guide explains how TUPE works in practice.

What Is TUPE and When Does It Apply?

TUPE implements the EU Acquired Rights Directive into UK law (retained post-Brexit) and protects employees when there is a "relevant transfer." There are two types of relevant transfer under the 2006 Regulations:

Business Transfers

A business transfer occurs when an economic entity — a business or part of a business — that retains its identity is transferred from one employer to another. The key question is whether the business continues as a going concern after the transfer: does it maintain essentially the same activities, using essentially the same people, assets, and methods? Share purchases where the legal employer does not change are not business transfers for TUPE purposes — the employment contracts remain with the company being sold, so no transfer occurs.

Service Provision Changes

A service provision change (SPC) is unique to UK law and covers three scenarios: (1) a client outsources a service to a contractor, (2) a client brings an outsourced service back in-house, and (3) the contract for an outsourced service is awarded to a new contractor (a "re-tender"). SPCs are common in sectors such as cleaning, catering, security, IT services, and facilities management. TUPE applies if the activities carried out are fundamentally the same before and after the change, and there is an organised grouping of employees whose principal purpose is carrying out the activities for the client.

Check whether TUPE applies to your situation with our TUPE Eligibility Checker.

What Transfers Under TUPE?

When a TUPE transfer occurs, the following transfer automatically from the old employer (the "transferor") to the new employer (the "transferee"):

Employment contracts — you become employed by the new employer on the same terms and conditions as if you had always been employed by them. Your length of continuous service carries over as if there had been no change of employer.
All contractual rights — salary, working hours, job title, holiday entitlement, notice period, restrictive covenants, enhanced redundancy entitlements, and all other contractual terms transfer intact.
Collective agreements — existing collective agreements negotiated with trade unions transfer and continue to apply, though the new employer is not bound to negotiate future agreements with the same union.
Liability for past acts — employment-related liabilities that arose before the transfer (for example, a discrimination claim based on events before the transfer date) transfer to the new employer. The transferee effectively steps into the transferor's shoes.

Occupational pension rights are a significant exception — pension benefits do not fully transfer under TUPE, though the new employer is required to provide a minimum level of pension provision. The detail is complex and specialist pension advice may be needed.

What Does NOT Transfer

Not everything transfers under TUPE. The following do not transfer:

Criminal liabilities of the employer
Occupational pension rights beyond the minimum required contribution
Employees who object to the transfer (see below)
Terms that derive from collective agreements where the agreement was negotiated more than one year before the transfer and those terms are no longer applicable (the "one-year rule" introduced in the 2014 amendments)

Dismissal Connected to a TUPE Transfer — Automatically Unfair

This is one of the most powerful protections TUPE provides. If you are dismissed and the reason for your dismissal is the transfer itself, or a reason connected to the transfer that is not an "economic, technical or organisational" (ETO) reason entailing changes in the workforce, that dismissal is automatically unfair. This means:

The dismissal is unfair regardless of how long you have worked for the employer — the two-year qualifying period for ordinary unfair dismissal does not apply to automatically unfair TUPE dismissals
There is no cap on compensation for automatically unfair dismissal where the reason is TUPE
Both pre-transfer dismissals (by the old employer to facilitate the transfer) and post-transfer dismissals (by the new employer to reduce the workforce) can be automatically unfair

The ETO Exception

A dismissal that is for an economic, technical or organisational reason entailing changes in the workforce is potentially fair — but only if the employer follows a fair procedure and acts reasonably. An ETO reason typically means the new employer needs fewer people to run the business (economic), or needs different skills or roles (technical or organisational). Merely wanting to reduce labour costs or harmonise terms with existing staff is not an ETO reason. The test is genuinely high and courts have interpreted "entailing changes in the workforce" to require actual changes to numbers or functions of employees, not just changes to terms.

Changing Terms After a TUPE Transfer

The new employer cannot simply impose new or different terms and conditions on transferred employees, even with their agreement, if the reason for the change is the transfer itself. Changes to terms are void if the sole or principal reason is the transfer. This means that "harmonisation" — bringing transferred employees onto the same terms as existing staff — is generally not permitted.

However, changes unconnected to the transfer are permissible. If, three years after a TUPE transfer, the employer needs to change working arrangements for genuine business reasons that have nothing to do with the original transfer, TUPE does not prevent that. The longer the gap between the transfer and the proposed change, the less likely a tribunal is to find the change was "connected to the transfer."

Changes for an ETO reason — with the employee's agreement and following proper consultation — are also permitted even if connected to the transfer.

The Right to Object

You have the right to object to being transferred to the new employer. If you object, your employment with the old employer ends automatically on the transfer date — but this is not a dismissal. This means you cannot claim unfair dismissal or redundancy pay based on the objection alone. The exception is if you can show that the transfer would involve a substantial change in working conditions to your material detriment — in that case, your objection amounts to a constructive dismissal and you can claim accordingly.

Information and Consultation Obligations

Both the old and new employer have legal obligations to inform and consult affected employees before a TUPE transfer. "Affected employees" means those who transfer and any employees of either employer whose employment could be affected by the transfer or by measures connected to it.

What Must Be Disclosed?

The following information must be given to affected employees (or their representatives) "long enough before the transfer to enable consultation":

The fact that the transfer is to take place, when, and why
The legal, economic, and social implications of the transfer for affected employees
Any measures the employer envisages taking in connection with the transfer — or, if none, a statement to that effect
If the employer is the transferor, information about any measures the new employer envisages taking

Where there are 10 or fewer employees and no recognised trade union or elected employee representatives, the employer can inform and consult directly with each affected employee individually. For larger workforces, elected employee representatives must be involved.

Consequences of Failure to Inform or Consult

Failure to comply with the information and consultation obligations is a separate claim from unfair dismissal. A tribunal can award compensation of up to 13 weeks' pay per affected employee. The employer cannot justify non-compliance on the grounds that the transferee failed to provide required information — that simply gives the transferor a contribution claim against the transferee.

TUPE and Redundancy

In a TUPE transfer, redundancy can arise if the new employer genuinely needs fewer staff than it has acquired. If you are made redundant for a genuine ETO reason after a TUPE transfer:

Your continuous service (including service with the old employer) counts for redundancy pay purposes
Any enhanced redundancy terms in your original contract transfer with you
A proper individual and collective consultation process must be followed
Selection criteria must be fair and objective

Calculate your redundancy pay including transferred service with our Redundancy Pay Calculator.

Step-by-Step: What to Do If TUPE Applies to You

Confirm whether TUPE applies — not every business change triggers TUPE. Check whether it is a business transfer or service provision change and whether you are an "assigned employee" who transfers.
Request full information from your employer — you are entitled to the TUPE information set out above. If it is not provided voluntarily, request it in writing. Note the date of any refusal.
Check what terms will be preserved — compare your existing contract with any proposed terms from the new employer. Any reduction in terms that is connected to the transfer is likely void.
Object if the new terms are materially worse — if the new employer intends to make substantial changes to your detriment, you may be able to treat the change as a constructive dismissal and claim accordingly rather than accepting diminished terms.
Elect employee representatives if needed — if there is no trade union, employees can elect representatives to receive information and be consulted on behalf of the workforce.
Take legal advice promptly — TUPE disputes are complex. Employment Tribunal time limits are strict (three months minus one day). Act quickly if you think your rights have been breached.

Frequently Asked Questions

Does TUPE apply if the company is bought through a share purchase?+

No. In a share purchase, the legal employer does not change — the company being bought remains the employer before and after the transaction. TUPE only applies when the employer itself changes. Employees' rights are unaffected in a share purchase because their contracts remain with the same employer throughout.

What if my new employer goes insolvent shortly after the transfer?+

There are special TUPE rules for pre-transfer insolvency that allow the new employer and employee representatives to agree certain changes to terms that would otherwise be prohibited. If the new employer becomes insolvent after the transfer, standard insolvency employment protections apply — certain arrears of wages, holiday pay, and statutory redundancy pay can be claimed from the National Insurance Fund.

Can the new employer change my job title or reporting line after a TUPE transfer?+

Changes to job title and reporting line can amount to a breach of contract if they significantly diminish your status or represent a material change in working conditions. Minor organisational changes that do not affect pay or duties are less likely to be challengeable. If a change is substantial and connected to the transfer, it may be void or give rise to a constructive dismissal claim.

I was dismissed by my old employer a week before the transfer. What can I do?+

Dismissals that occur immediately before a transfer are treated as connected to the transfer under TUPE unless the employer can show an ETO reason. The new employer inherits the liability for the dismissal. You can bring an unfair dismissal claim against either the old employer or the new employer — the new employer effectively steps into the old employer's shoes. The two-year service qualification does not apply if the dismissal was connected to the transfer.