What is TUPE, and what happens to my job if the business is sold?
When a business or a service changes hands, your job usually moves with it on the same terms and with your continuity intact. What transfers, what the new employer can and cannot change, and the objection trap.
- Difficulty
- advanced
- Time
- 16 min
- Read
- 5 min
- Safety
- warning
Short answer
TUPE applies where a business or part of one changes hands, and — in Great Britain — where a service is outsourced, brought back in-house or moved between contractors. Your contract, your continuity of service and almost all rights and liabilities transfer automatically to the new employer. Dismissal is automatically unfair where the sole or principal reason is the transfer, unless there is an economic, technical or organisational reason entailing changes in the workforce.
TUPE is searched at the moment someone is frightened, which is why the plain answer matters: in the ordinary case nothing about your job changes except the name on the payslip. The complications come afterwards — attempts to harmonise terms, restructures dressed up as something else, and the objection right, which is the single most commonly misunderstood provision in employment law.
Safety
Step by step
- Work out whether it is a transfer at all.Two situations qualify. A business transfer, where an economic entity changes hands and keeps its identity. And, in Great Britain, a service provision change — outsourcing, retendering to a new contractor, or bringing a service back in-house. Buying the shares in a company is not a transfer, because the employer is still the same company.
- Know what transfers with you.Your contract on the same terms, your continuous service, and virtually all rights and liabilities — including liability for things the old employer did before the transfer. Criminal liability does not transfer. Collective agreements transfer with modifications.
- Check the pension position carefully.Occupational pension scheme rights relating to old age, invalidity and survivors' benefits do not transfer, and the new employer instead has a minimum obligation to provide some pension arrangement. Everything else in a scheme can transfer. Ask specifically what is happening to your pension.
- Expect information and consultation.Your employer must inform representatives about the fact and date of the transfer, the reasons, the legal, economic and social implications, and any measures envisaged — including by the new employer — and must consult with a view to agreement where measures are envisaged. Small transfers can be consulted on directly with employees rather than through elected representatives.
- Know the employee liability information deadline.The old employer must give the new one defined information about each transferring employee — identity, age, contract particulars, recent disciplinary and grievance matters and claims — no later than a set period before the transfer. Failure gives the new employer a claim, not you, but it explains a good deal of the last-minute paperwork.
- Understand dismissal protection.A dismissal is automatically unfair where the sole or principal reason is the transfer. It is not automatically unfair where there is an economic, technical or organisational reason entailing changes in the workforce, which includes a genuine post-transfer redundancy or a change of workplace location — but the ordinary fairness tests still apply.
- Understand changes to terms.A variation is void where the sole or principal reason is the transfer, even if you agreed to it. That is unusual: normally agreement cures a variation. Exceptions exist for economic, technical or organisational reasons and for variations the contract already permitted.
- Treat the objection right with great care.If you tell either employer that you object, your contract ends on the transfer and you are treated as not dismissed for any purpose. No notice, no redundancy, no claim. It is almost never the right thing to do without advice.
- Know the different route where conditions worsen.Where the transfer involves a substantial change in working conditions to your material detriment, you may treat the contract as terminated and you are treated as dismissed. Ordinary constructive dismissal also remains available. Both preserve a claim; a bare objection does not.
- Watch the timing on any claim.A failure to inform and consult must be brought within three months of the transfer completing, and awards are made per employee. Other claims carry the ordinary tribunal limits, and Acas notification comes first.
- Northern Ireland: check which parts apply.Service provision change does not apply in Northern Ireland at all, and is dealt with by separate Northern Ireland regulations. None of the 2014 amendments extend to Northern Ireland, so the dismissal protection is drafted more widely there and the direct-consultation route for small employers does not exist.
Tips
- Ask in writing for the measures the new employer envisages. It is information you are entitled to and it tells you what is actually coming.
- Keep your existing contract, your continuous service date and your last few payslips somewhere outside the employer's systems.
- Say nothing about objecting until you have spoken to Acas. It is a one-way door.
Common mistakes
- Objecting in order to get redundancy pay — It produces the opposite result. Objecting means you are treated as not dismissed at all, so there is no redundancy pay and no claim.
- Assuming a share sale is TUPE — The employer does not change, so nothing transfers. That is usually good news, but it also means the TUPE consultation rights do not arise.
If it doesn't work
You were told to sign a new contract on transfer day
Cause: An attempt to vary terms because of the transfer — Fix: You do not have to sign. A variation whose sole or principal reason is the transfer is void. Ask for the reason in writing and take advice from Acas before agreeing to anything.
Nobody consulted anyone
Cause: A failure of the information and consultation duty — Fix: Raise it in writing and note the three-month deadline from the transfer. Awards are made per affected employee and the burden of showing compliance is on the employer.
You were dismissed just before the transfer
Cause: Sometimes done to reduce the transferring headcount — Fix: Liability for a dismissal connected with the transfer generally passes to the new employer, and a dismissal whose principal reason is the transfer is automatically unfair. Notify Acas promptly — the ordinary time limits apply.
Questions people ask
Can my new employer change my terms to match everyone else's?
Harmonisation is the classic problem. A variation whose sole or principal reason is the transfer is void, even with your agreement, so a change made purely to align terms is vulnerable. Changes for a genuine economic, technical or organisational reason are different. Take advice before signing new terms.
Do I keep my length of service?
Yes. Continuity of employment transfers, which protects your notice entitlement, redundancy calculation and unfair dismissal rights.
What if I do not want to move?
Objecting ends your employment with no dismissal and no payment. If the reason is that conditions are substantially worse, the material detriment route preserves a claim. Speak to Acas before saying anything to either employer.
Does it apply to a small business or a single client contract?
Yes, if the tests are met. Service provision change in particular catches small outsourcing arrangements — a cleaning contract moving between providers can be a TUPE transfer.
Does it apply if the company is bought by share purchase?
No transfer takes place, because your employer is the company and the company has not changed. The owners have. Your terms are unaffected by the sale itself.