When Does TUPE Apply?

What is TUPE?

The Transfer of Undertakings (Protection of Employment) Regulations, known as TUPE, give employees certain rights, and employers certain responsibilities, when one business is transferred to another. TUPE’s purpose is to make the process smooth and fair for workers.

You can explore how the Regulations protect your employment rights in our guide ‘What rights do the TUPE Regulations protect?’ This guide sets out when TUPE applies to you.
 

Who does TUPE apply to?

All businesses in the UK are subject to the TUPE Regulations. It doesn’t matter if they’re a small, local company or a multinational conglomerate.

Two types of transfers are covered:

• Business transfers; usually when one company buys, or merges with, another
• Service provision transfers; generally when services are being out-sourced or in-sourced

In effect, TUPE means that a new employer can’t suddenly change everyone’s contracts and working conditions, or fire everyone, as a result of the transfer.

But despite the protections in place, this doesn’t mean that all workers are automatically covered by TUPE.
 

Am I covered by TUPE?

Generally, TUPE covers you when your work (or the services you provide) stay the same, whether you’re an employee or external contractor. However, there are various other factors which you need to look at in order to find out whether or not you are covered:

If you work in the UK:

• You’re protected if you work for a UK or international company that undertakes business in the UK.
• You’re not protected if you’re the company’s sole UK employee, or in a small minority of UK-based employees in a business that operates outside the UK.

 

If you work outside the UK:

• You’re protected if your employer is based in the UK. As long as the employer clearly has an undertaking in the UK, like an office or shop, TUPE should assure the continuation of your service.
• You’re not protected if the employer has no UK presence. For TUPE to apply, there must be an organised group of employees in the UK.

 

If your employer’s ownership transfers:

• You’re protected if your old employer is completely taken over by the new employer, and ceases trading under its previous name.
• You’re not protected if the business merges with another, or is bought out, but retains its existing identity. TUPE also won’t cover you if there has only been a transfer of shares or assets, since business ownership hasn’t materially changed.

 

Your services transfer:

• You’re protected if you can clearly be identified as providing the service that’s being transferred. For example, if you work for the company as a cleaner, but the new employer decides to use an external cleaning contractor instead, TUPE will transfer your employment to the new contractor. Likewise, if an employer brings certain services in-house, contractors who have carried out similar work on a regular basis are generally protected under TUPE.
• You’re not protected if you’re employed on an ad hoc, freelance basis, along with others. Also excluded are changes in suppliers of services and goods for company use, such as stationery suppliers, and situations where you are contracted for single or short-term activities.

 

Your contract and conditions change:

• You’re protected if your new employer attempts to change your contract terms and conditions, holidays, or reset your continuation of service, although there are exceptions if your employer has Ethical, Technological, and Organisational (ETO) reasons to do so. Your employer is also prohibited from changing your contract ahead of the transfer. If you have a collective agreement in place (possibly negotiated by your union), its terms can be renegotiated after a year from your transfer, but TUPE covers you indefinitely, and the new employer would have to prove that any alterations are not related to the transfer.

• You’re not protected if, to prevent job losses, your pay is cut, or your terms and conditions change. This falls under ETO reasons, which are justified in a bid to keep a business properly functioning. However, these need to be agreed by your union or employee representatives. This also applies when activities or services are broken up and reallocated, fundamentally altering your work.

 

Your role or position changes:

• You’re protected if the new employer tries to fundamentally change the work you do for the company. The TUPE Regulations essentially state that your job must stay the same, although the new employer is permitted to improve your terms and conditions.
• You’re not protected if you accept a promotion, or resign. By accepting a promotion, you’ll be signing a new contract with your new employer, so TUPE does not apply. You don’t have to keep working for the new employer either, but this will be treated as a resignation, effective once the transfer is complete. Likewise, if you commute to work and the new employer asks you to travel further to a different location, the TUPE Regulations do not necessarily prevent this. You can, however, explore alternative arrangements with your new employer to see if an agreement can be reached, and if you are asked to make an unreasonably long commute, this may not be lawful.

 

Your old employer is insolvent:

• You’re protected if the new employer takes over the business to rescue it (and hopefully save your job). This still constitutes a transfer under the TUPE Regulations.
• You’re not protected if the business is being closed down. However, you will still be able to make a claim if your employer owes you money.  

 

You lose your job:

• You’re protected if the new employer has dismissed you because of the transfer; for example, if they already have an employee performing your role. If this happens, you might have an unfair dismissal claim, and you should seek urgent advice from an employment law solicitor.
• You’re not protected if you’re sacked for misconduct, or any other reason that would ordinarily result in the termination of your employment. The new employer may also use provable ETO reasons for letting you go (‘for the good of the business as a whole’), though you may still be entitled to redundancy pay. If you believe you’ve been unfairly dismissed, legal action may be necessary, and you should seek urgent legal advice.

Does TUPE apply to business transfer?

Yes, TUPE (Transfer of Undertakings (Protection of Employment) Regulations) applies to business transfers.

This includes situations where a company is bought or merges with another company, as well as service provision transfers, such as outsourcing or insourcing services.

Who does TUPE protect?

TUPE protects employees who are involved in a business transfer or a service provision change. This includes both employees of a company that is being transferred and employees of a service provider that is changing due to outsourcing, insourcing, or contract changes.

However, the protection does not automatically extend to all workers; specific conditions must be met, such as the employee being part of an organised grouping of employees that is transferring.

Does TUPE apply to agency workers?

Generally, TUPE does not apply to agency workers. TUPE is designed to protect employees who are permanently employed by a business that is being transferred.

Agency workers, who are typically employed by the agency rather than the business itself, are usually not covered by TUPE. However, there might be exceptions depending on the specific circumstances and the nature of the contractual arrangements.

Do I have to be TUPEd over?

If you are an employee and your employment is part of a business transfer or service provision change that falls under TUPE regulations, then you are typically 'TUPEd over' to the new employer.

This means your employment terms and conditions, along with your continuity of service, should be preserved.

However, you are not obligated to continue your employment with the new employer; you can choose to resign, but this would generally be treated as a resignation, not a dismissal.

How do I find out for sure if I’m protected by TUPE?

While wide-ranging, TUPE protection isn’t always guaranteed.Often, it depends on very specific circumstances.

It’s usually best to discuss your situation with an employment solicitor who will advise you on your rights, and help you take legal action if your old or new employer has broken the law.

Use our quick quote form to find an employment solicitor who can help you make sense of the Regulations and keep you protected.