Transfer of Undertakings
TUPE

Employee representatives must be informed of the transfer in advance and consulted about any proposed measures which may affect employees. Failure to comply with these obligations may result in compensation of up to 13 weeks’ pay for each affected employee. Where there is no recognised trade union or existing employee representatives, representatives must normally be elected. However, where the employer has fewer than 50 employees or fewer than 10 employees are transferring, the employer may inform and consult directly with the affected employees without electing representatives.

An employee who is dismissed because the sole or principal reason for dismissal is a TUPE transfer may bring an Employment Tribunal claim for unfair dismissal. Such a dismissal is automatically unfair unless the sole or principal reason is a genuine economic, technical or organisational (ETO) reason involving changes in the workforce, in which case the ordinary unfair dismissal rules apply.

Tribunal proceedings in relation to an unfair dismissal claim must be brought within 6 months less one day of the effective date of termination of employment, where that date falls on or after 1 October 2026. Where the effective date of termination falls before 1 October 2026, the previous time limit of 3 months less one day continues to apply.

Claimants must (unless exempt) notify Acas and obtain an early conciliation certificate before commencing Employment Tribunal proceedings. Provided Acas is notified before the applicable time limit expires, the time limit is paused during early conciliation, which can last up to 12 weeks, and the claimant will have at least one month from receiving the certificate to present the claim.

Under TUPE, where a transfer involves, or would involve, a substantial change in an employee’s working conditions to their material detriment, the employee may treat their employment contract as terminated and will be treated as having been dismissed. They may then have a claim for unfair dismissal. What amounts to a ‘substantial change’ and ‘material detriment’ is a matter for the Employment Tribunal to determine on the facts of the case.

Terms and conditions derived from collective agreements may be varied with effect from a date more than one year after the transfer, provided that the employee’s contract, taken as a whole, is no less favourable. Furthermore, the new employer is not bound by changes arising from collective agreements negotiated after the transfer where the new employer did not participate in those negotiations.

Where the previous employer provided an occupational pension scheme, pension benefits accrued before the transfer remain protected. The new employer is not normally required to continue the same pension scheme but must provide qualifying alternative pension arrangements where the statutory pension protection requirements apply. Where the new employer provides a money purchase (defined contribution) or stakeholder pension scheme, it must either match employee contributions up to a maximum of 6% of basic pay or, where the previous employer contributed to a money purchase scheme, contribute at least the amount the previous employer was required to contribute immediately before the transfer. Different statutory requirements apply to final salary (defined benefit) schemes.