What is TUPE? A Guide to TUPE Transfers

Key takeaways

TUPE protects employees when business ownership changes – job, pay, benefits transfer automatically
Applies to business transfers and service provision changes
Employees can’t usually claim redundancy because they don’t want to transfer
Old and new employers have strict consultation and information duties

Managing a business transfer or service change can feel like walking a tightrope. You’re trying to keep your operations running while navigating a sea of paperwork, and the last thing you want is a surprise Employment Tribunal claim landing on your desk.

So, what is TUPE? At its heart, it’s a set of rules that protects employees when a business changes hands, making sure they don’t lose their jobs or hard-earned rights just because there’s a new name on the door. This guide will walk you through the TUPE process step by step to help you protect your team and stay on the right side of the law.

What does TUPE stand for and what does it mean?

TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations 2006. While that’s a mouthful, the principle behind it is actually quite straightforward: when a business or service changes ownership, its employees move with it.

But what does TUPE mean in a practical, day-to-day sense for your business? Essentially, it acts as a safety net. It means that if you take over a company, you don’t just get the desks, the computers, and the customer list; you also ‘inherit’ the staff.

The key thing to remember is the automatic transfer principle. Under these rules, employees keep their:

Original contract terms and conditions.
Existing pay and benefits.
Continuous length of service (their “start date” remains the same).

It’s important to get this right because, as an employer, you’re also taking on the legal liabilities of the old management.

If the previous owner owed a staff member back pay or had an ongoing grievance, that becomes your responsibility the moment the transfer is complete.

When does TUPE apply?

Knowing exactly when TUPE applies is half the battle. The law isn’t always black and white, but the two main categories for when TUPE applies are clear: business transfers and changes to service provision.

Business transfers

This is where a business, or a part of one, moves from one employer to another. For this to count as a TUPE transfer, the ‘economic entity’ being moved has to keep its identity.

Think of it like this: if you buy a local cafe and keep running it as a cafe with the same equipment and customers, TUPE likely applies. Some examples include:

Mergers — When two companies combine to form a new one.
Acquisitions — When one company buys another as a ‘going concern’.
Asset sales — Buying the tangible parts of a business (like a shop and its stock) to run the same type of trade.

Service provision changes

This is a major area for sectors such as cleaning, catering, and security. It’s when a client changes who carries out a specific service for them. You’ll likely see it during:

Outsourcing — Bringing in a contractor to do work that was done in-house before.
Retendering — Moving a contract from one external provider to another.
Insourcing — Bringing a previously outsourced service back in-house.

For this to trigger TUPE, there must be an ‘organised grouping of employees’ whose main job is to do that specific work for that particular client.

When TUPE doesn’t apply – common scenarios

It’s just as important to know when TUPE doesn’t apply, so you aren’t worrying about rules that don’t fit your situation. TUPE usually won’t be triggered if:

It’s a share sale — If someone buys the shares of a company, the legal employer stays the same — only the shareholders change.
Only assets are moving — If you’re just buying a second-hand delivery van or a piece of machinery, but not the business itself.
The contract is for goods only — Like switching your stationery or food supplier.
It’s a one-off event — Hiring a security firm for a single weekend festival.

TUPE is one of the core employment laws in the UK, so knowing which circumstances it applies to is crucial so you can stay compliant without risking penalties.

Does TUPE apply to contractors and agency workers?

This is where things can get a bit unclear, but the short answer is that TUPE protects employees who have a standard contract of service. However, the legal definition of an ‘employee’ under TUPE is actually much wider than in other areas of UK law.

‘Limb (b)’ workers

In recent years, several landmark tribunal cases have confirmed that ‘limb (b) workers’ — people who aren’t traditional employees but aren’t fully independent businesses either — can also be protected by TUPE.

This often includes:

Gig economy workers or couriers who must perform the work personally.
Casual staff who have a regular, ongoing relationship with the business.
Zero-hours workers, depending on how their contract is set up in practice.

Two huge names have helped shape this: Uber and Ryanair.

Uber — The Supreme Court famously ruled that Uber drivers are workers, not independent contractors. Because Uber controlled their fares, their routes, and even their performance via ratings, the court decided they were subordinate and dependent on the platform.
Ryanair — A landmark 2025 Court of Appeal victory for pilots (Lutz v Ryanair) confirmed that even highly skilled professionals engaged via a third-party agency can be agency workers. Despite Ryanair arguing they were self-employed contractors on five-year deals, the court looked at the fact that they wore Ryanair uniforms, had Ryanair IDs, and were fully integrated into the team. They were entitled to the same rights as directly employed pilots, which has massive implications for TUPE transfers in the aviation and gig economy sectors.

Who is excluded?

The only people who are generally safe to leave out of a transfer are independent contractors who are genuinely in business on their own account.

If they have the right to send someone else to do the work (substitution), use their own equipment, and work for multiple clients at once, they usually won’t transfer.

What is an “organised grouping” of employees under TUPE?

If you’re taking over a contract, you must know exactly who is in the ‘organised grouping’ of staff.

To count as an organised grouping, the team must be:

Deliberately organised — You (the employer) must have made a conscious decision to group these people together to serve a specific client. It shouldn’t just be a coincidence of shift patterns.
Identifiable as a team — They should be recognisable as “the [Client Name] team.” Think about things like dedicated email groups, specific project managers, or even just a shared workspace.
Principally assigned — Their primary purpose must be carrying out the work for that specific client. If they’re constantly being pulled away to help other customers, they might not be organised enough to trigger TUPE.

In 2025, the Employment Appeal Tribunal (EAT) reminded businesses that a grouping doesn’t have to be a formal department or a team with a specific name like ‘The Service Team’.

If a settled group of people consistently works for one specific client, they could all be eligible to transfer. Don’t assume that a lack of formal structure protects you; if the reality of their daily work is dedicated to that client, TUPE likely applies.

For more advice on managing these tricky transitions, our HR services can help you audit your organised groupings before the transfer date.

How to manage a TUPE process: A step-by-step guide

Navigating a TUPE transfer can feel like a daunting task, but breaking it down into manageable steps makes the whole TUPE process much clearer.

Both the outgoing employer (the “transferor”) and the new employer (the “transferee”) have specific legal duties they must fulfil.

Step 1: Confirm if TUPE applies and identify affected staff

First, you need to be sure that the transaction actually triggers TUPE. If you’re unsure, it’s strongly recommended to seek legal guidance to make sure you’re taking the right route. Our TUPE advice support can help your business identify a TUPE transfer and understand the necessary measures and requirements.

Once confirmed, identify every assigned employee, including those on maternity leave or long-term sick leave, who spends the majority of their time on the transferring business or service.

A word of caution here: figuring out who’s “assigned” isn’t always as simple as checking a timesheet. It’s a common myth that spending more than 50% of your time on a specific contract means you automatically transfer, or that spending less than 50% means you don’t. In reality, it’s about the substance of their role and where their duties really lie. It’s a bit of a headache even for the pros, so if you’ve got staff splitting their time across different areas, this is definitely a point where you’ll want a second opinion.

Remember, affected employees aren’t just those moving; they also include staff staying behind whose roles might be impacted by the change, as well as staff at the transferee company who are in a similar role to incoming staff or may be subject to reorganisation because of the incomings.

Step 2: Inform and consult

You’re legally required to inform all affected employees of the transfer, including its timing and reasons. While there’s no fixed TUPE consultation period, it must be “meaningful” and start early enough to allow for genuine dialogue.

Since July 2024, the rules for small businesses have become much simpler. You can now consult directly with employees without the need to elect formal representatives if:

Your organisation employs fewer than 50 staff in total.
Or, the transfer involves fewer than 10 employees, regardless of your total company size.

This only applies if there is no existing trade union or other employee representative already in place.

Step 3: Share Employee Liability Information (ELI)

The outgoing employer must provide the new employer with Employee Liability Information (ELI).

This includes names, ages, employment particulars, and any disciplinary or grievance records from the last two years.

By law, this must be handed over at least 28 days before the transfer date. If the information is missing or wrong, the new employer can claim at least £500 in compensation for each affected employee.

Step 4: Disclose planned measures

The new employer must tell the old employer about any measures they plan to take after the move. Measures are essentially changes to working practices, such as:

Changing pay dates.
Altering shift patterns or working hours.
Restructuring or planned redundancies.

The outgoing employer is then responsible for informing their staff about these proposed changes.

If you’re worried about how a transfer might affect your team’s mental health during these changes, it’s worth checking out our guide on managing mental health in the workplace.

Step 5: Implement the transfer

On the big day, the employees automatically transfer to the new employer.

All their contractual rights, continuous service length, and even outstanding holiday balance move with them. The new employer should confirm the change in writing to all transferred staff as soon as possible.

TUPE rules for changing contracts

One of the biggest headaches for any business owner taking on a new team is dealing with contract disparity.

You might find yourself with two people doing the exact same job, but because one transferred over under TUPE, they’re on a higher salary or have better holiday perks than your original staff.

Naturally, you’ll want to fix this. But in the world of TUPE, the harmonisation is a major red flag.

Can I change contracts to match my existing team?

The short answer is: no. You can’t change a contract simply to ‘harmonise’ terms and conditions with your current workforce.

In fact, any change made where the sole or principal reason is the transfer itself is legally void and unenforceable. This means that even if your new employees agree to the change, or you offer them a nice bonus to sign a new deal, they could still claim they’re entitled to their old, better terms months or even years down the line.

There is one way you can make changes, though. You’re allowed to tweak contracts if you have a valid Economic, Technical, or Organisational (ETO) reason that involves a change in the workforce. We’ll dive into what that actually looks like in practice a bit further down, but just keep in mind that “making things the same as everyone else” doesn’t count as a valid ETO reason!

How long after TUPE can a contract be changed?

There is a common myth that TUPE protections expire after a year has passed.

In reality, there is no set time limit. If you try to change a contract five years after a transfer, and the main reason is still to align them with everyone else, it could still be found unlawful.

However, you can make changes if the reason is entirely unrelated to the transfer. For example, if your business needs have changed due to a new market challenge three years later.

The ‘ETO’ exception

You’re allowed to make changes connected to the transfer itself if you have a valid Economic, Technical, or Organisational (ETO) reason that involves a change in the workforce.

Economic — Your business is facing serious financial struggles and needs to cut costs to survive.
Technical — You’ve introduced new equipment or processes that fundamentally change how the job is done.
Organisational — You’re undergoing a genuine restructuring or moving your office location.

Crucially, an ETO reason must involve a change in the workforce, meaning a change in the number of staff or the specific duties they perform. You can’t just use ‘admin efficiency’ as an ETO reason to cut someone’s pay.

What about positive changes?

TUPE is designed to protect employees, not hold them back. But you might be wondering: if I can’t change a contract to ‘harmonise’ terms, does that mean I can’t give my new team a pay rise or extra holiday to match everyone else?

Technically, the law is still quite strict here. Any change made because of the transfer is technically void — even the good ones! However, on a practical level, if an employee has made an informed decision to agree to terms that leave them better off, they’re very unlikely to make a legal claim about it. After all, if they haven’t suffered any loss or “detriment”, they wouldn’t really have anything to claim in a tribunal.

If you’re looking to improve their terms, just make sure you get the agreement in writing and clearly show how they’re better off. For more help navigating these tricky conversations, our employment law services are here to make sure you stay on safe ground.

Can an employee claim for redundancy if they choose not to transfer under TUPE?

A common situation in a TUPE transfer is when an employee would rather accept a redundancy payout than join a new company. So, as a business, can you refuse their claim for redundancy and still stay compliant?

In short: yes. Under TUPE rules, if there is a valid transfer and a role for that person at the new company, they don’t have an automatic right to redundancy. If they simply don’t want to work for the new boss, their refusal is usually treated as a resignation.

This means:

They aren’t entitled to statutory redundancy pay.
They generally lose the right to claim unfair dismissal.
Their employment ends on the date of the transfer.

It’s important to note, though, that an employee could treat themselves as dismissed and claim redundancy pay could claim redundancy if the transfer involves a substantial change to their working conditions that is to their ‘material detriment.’

What if they aren’t eligible to transfer?

There’s one other scenario to keep in mind. Sometimes, an employee might not actually be eligible to transfer — for example, if they aren’t “principally assigned” to the part of the business moving away. If that happens, and there’s no longer a role or any work for them to do in your remaining business, they would usually be treated as redundant rather than having resigned.

While you shouldn’t use TUPE regulations as a shortcut to trim your team, redundancies are allowed if you have a genuine ETO reason. If you do need to make staff redundant post-transfer, make sure you count their service from their original start date when calculating redundancy pay.

How Citation can support your TUPE transfers

Take the stress out of business changes with Citation’s specialised TUPE advice for employers. Whether you’re buying a new firm, outsourcing services, or bringing them back in-house, our team of HR professionals and employment law consultants are here to ensure your transfer goes by the book.

With our TUPE support, you’ll get:

24/7 expert HR advice
Tribunal protection of up to £1.5 million a year
Bespoke HR documentation
Smart management hub
End-to-end guidance

What is TUPE? A Guide to the TUPE Process for UK Businesses