TUPE guide for UK employers

When a business changes hands, its employees move with it. The Transfer of Undertakings (Protection of Employment) Regulations 2006 known everywhere as TUPE, protects employees when ownership, contracts, or services are transferred.

For many small- and medium-sized employers, TUPE feels like alphabet soup: rules, reps, measures, liabilities. Yet the principle is simple: employees shouldn’t lose their jobs or rights just because the business changes hands.

In 2025, TUPE remains vital. With outsourcing, mergers, and service reshuffles on the rise, getting it wrong can lead to expensive tribunal claims. This guide explains TUPE clearly, providing practical steps so you can stay compliant and keep your employees secure.

What is TUPE and why it matters

TUPE exists to protect employees when a business or service changes ownership. Under UK regulation, every employment contract transfers automatically to the new employer called the transferee on the same terms and conditions as before.

That includes:

• Pay, benefits, and working hours.

• Length of service (continuity is preserved).

• All rights, powers, and obligations under the previous contract.

The outgoing employer, known as the transferor, hands over both staff and liability. Dismissals connected solely to a TUPE transfer are automatically unfair unless justified by an economic, technical, or organisational (ETO) reason involving workforce changes.

In plain terms: if you buy, merge with, or take over another company, the staff who were part of that operation move across with full rights intact.

When TUPE applies

TUPE applies in two broad situations, each with its own tests.

Business transfer

When a business or part of one is sold, merged, or otherwise changes ownership and retains its identity, TUPE applies.
Example: a coffee-shop chain sells one branch to another operator, and that branch continues trading with the same staff and customers.

Service provision change

This happens when a client:

• Outsources work (e.g., cleaning or catering).

• Brings it back in-house after outsourcing.

• Switches contractors providing the same service.

If there’s an organised group of employees doing essentially the same work for the same client, TUPE probably applies.
Grey areas arise when work is fragmented or short-term. For this reason, seek professional legal advice to determine whether TUPE may apply to your scenario.

Employer duties under TUPE

When TUPE applies, employers have defined legal duties to manage the transfer properly. These responsibilities cover the period before, during, and after the transfer to ensure employees’, rights are fully protected.

Failure to comply with these duties can expose both the outgoing and incoming employers to joint and several liability for potentially expensive tribunal claims. After the transfer, the TUPE Regulations will govern the scope of employees’ continuing rights, with all existing statutory and contractual obligations passing to the new employer.

Before the transfer: Planning and preparation

Transferor (Current employer)

• Identify affected employees early.
  Determine who will transfer by assessing which staff are “assigned” to the business or service being moved. This often means more than 50% of their working time is spent in that function.

• Provide Employee Liability Information (ELI).
  Under UK regulation, the transferor must share written details of each transferring employee with the new employer at least 28 days before the transfer.
  ELI must include:

1. Identity and age of the employee

2. Employment terms and conditions

3. Disciplinary and grievance records

4. Any collective agreements that apply

• Inform and consult employees or representatives.
  The employer must tell staff:

1. That a transfer is taking place.

2. The likely date and reasons.

3. The legal, economic, or social implications for them.

4. Whether any “measures” (planned changes) are expected.

For SMEs affected by the 2024 rule changes, consultation may now be direct with employees rather than through representatives if there are fewer than 10 affected staff.

• Prepare HR data and documentation.
  Review contracts, job descriptions, and records to ensure they are accurate and GDPR-compliant before sharing.

Our secure storage ensures this process is safe and traceable.

Transferee (New employer)

• Engage early with the transferor
  Request ELI promptly and assess any liabilities that will transfer, such as ongoing disciplinary issues or holiday accruals.

• Plan workforce integration
  Review incoming roles, potential overlaps, and cultural fit. Begin planning for onboarding or ETO (economic, technical, or organisational) changes if required.

• Communicate intentions
  If the transferee anticipates measures such as location changes or new technology they must inform the transferor, who then informs employees.

During the Transfer: Execution and Communication

Both employers

• Maintain transparency and cooperation
  The transferor and transferee should coordinate messaging to employees. Mixed communication often leads to confusion and mistrust.

• Provide clear timelines
  Confirm the official transfer date, contact points, and support channels.

• Protect employee data during transfer
  Use secure digital methods for sharing personnel files and payroll data.

• Ensure payroll and HR continuity
  There must be no interruption to pay or benefits on the day of transfer. Systems should align so the handover feels seamless to employees.

Transferor

• Facilitate smooth exit
  Remove transferred employees from payroll and access systems on the effective date.

• Archive their records appropriately under GDPR retention rules.

Transferee

• Welcome and onboard transferred employees
  Provide a day-one induction that introduces organisational values, contacts, and new systems.

• Recognise continuity of employment
  There should be no new probation periods or breaks in service.

• Apply existing contractual terms
  Maintain the same pay, benefits, and working arrangements from day one.

After the transfer: Integration and ongoing obligations

Transferee

• Honour all inherited rights and liabilities
  This includes pending grievances, disciplinary proceedings, or tribunal claims. Under UK regulation, these responsibilities transfer automatically.

• Consult on any post-transfer “measures.”
  If changes to terms, roles, or work locations are planned, they must be justified by a valid ETO reason and discussed with staff before implementation.

• Monitor employee relations
  Transferred teams often experience uncertainty. Regular check-ins help maintain morale and reduce disputes.

• Retain documentation
  Keep ELI, consultation notes, and employee correspondence for at least six years to evidence compliance if challenged.

• Continue GDPR compliance
  Update privacy notices to reflect new data-control responsibilities.

Transferor

• Support post-transfer clarification if needed
  Provide additional information to the transferee if discrepancies in ELI arise.

• Finalise any residual obligations
  Settle outstanding pay, bonuses, or holiday for non-transferring employees.

Penalties for non-compliance

Failure to meet TUPE duties can have real financial consequences.

• Failure to inform and consult: up to 13 weeks’ pay per affected employee.

• Failure to provide ELI:  compensation based on losses to the transferee, with a minimum award of £550 per employee

• Unfair dismissal linked to transfer: claim for unfair dismissal

Beyond legal risk, poor handling damages trust and retention. Transparent communication and meticulous records both achievable within our HR management system are your strongest safeguards

Documenting each step in our HR system provides the paper trail needed if questions arise later.

TUPE consultation and communication

The July 2024 update to TUPE simplified consultation for small employers.
If you have fewer than 50 employees and fewer than 10 affected, you can now consult directly with individuals instead of electing representatives.

Direct consultation doesn’t mean informal chats. You must still:

• Explain the reason for the transfer.

• Provide written details of timing, impact, and measures.

• Allow staff to ask questions and raise concerns.

What’s changed is flexibility, you can communicate faster and more personally.

Practical tip: Record dates, copies of letters, and meeting notes. Our document-storage and timeline tools make this effortless and legally robust.

TUPE “measures” and lawful changes

A measure under TUPE means any planned change to employees’ terms or working arrangements because of the transfer, for example, relocation, shift changes, or redundancies.

Under UK regulations, changes are void if the sole or principal reason is the transfer itself.
However, further regulations allow changes for a genuine Economic, Technical, or Organisational reason (ETO) that requires workforce adjustments.

Examples

• Lawful: redundancies where duplicated roles make the business unsustainable.

• Lawful: technical changes (such as new software) requiring retraining.

• Unlawful: pay cuts simply to align salaries between merging teams.

If changes are necessary, consult early, explain the ETO reason, and document everything.

Protecting employee data and HR records

TUPE compliance depends on clean data. The transferor must share accurate employee information with the transferee while complying with UK GDPR.

Data must include:

• their name

• their age

• their written statement of employment particulars

• any disciplinary and grievance records, or ongoing cases, from the last 2 years

• any collective agreements with a trade union that affect employees' terms and conditions

• any claims employees have made against the old employer in the last two years, or that the old employer reasonably believes they might make following the transfer. For the latter, there must be reasonable grounds for such belief, which would ordinarily require supporting evidence (for example, a formal grievance, written complaint, or correspondence indicating an intention to pursue a claim)

Only information relevant to employment should be transferred.

Using our secure HR software protects confidentiality and ensures each dataset has an audit trail, because good records aren’t bureaucracy; they’re your first defence against future claims.

After the transfer: What happens next

On transfer day, employment relationships move automatically. New contracts would be issued with the same terms and condition, and a continuous employment start date from the date they started with the transferor with no break in service.

Your post-transfer responsibilities

• Maintain the same pay, hours, and benefits.

• Recognise length of service for redundancy and leave.

• Communicate culture, policies, and reporting lines early.

• Address grievances quickly; unresolved issues often stem from confusion, not conflict.

TUPE for small businesses

Many small employers assume TUPE doesn’t apply to them. It does.
The difference is in how you meet the obligations, not whether they exist.

The new simplified consultation rules mean you can speak directly with employees, but you still must:

• Inform them in writing.

• Share accurate ELI.

• Keep proof of communication.

Small firms often benefit from using structured templates and external advice. We offer both ready-to-use letters, consultation trackers, and a 24/7 Advice Line for complex cases.

Compliance isn’t about paperwork; it’s about peace of mind.

Key risks and common mistakes around TUPE

1. Missing that TUPE applies: If you wait until after contracts are signed, you’ve already inherited liability.

2. Inadequate consultation: Failing to inform staff properly triggers tribunal awards even when the transfer itself was smooth.

3. Illegal changes to terms: Standardising pay or holidays without an ETO reason breaches TUPE.

4. Poor record-keeping: Lost absence or pay data can invalidate ELI and create compensation claims.

5. Rushing integration: Culture clashes are common, plan communication beyond the legal minimum.

Avoiding these errors protects both your reputation and your balance sheet.

Practical TUPE checklist for employers

Before the transfer

• Confirm if TUPE applies.

• Identify affected employees.

• Inform and consult staff or reps.

• Provide ELI to the new employer (28-day rule).

• Audit contracts and records for accuracy.

During the transfer

• Coordinate payroll and benefit systems.

• Ensure IT and HR data transfer securely.

• Communicate the official handover date.

After the transfer

• Maintain all terms and conditions.

• Address ETO changes with consultation.

• Onboard and train staff in new processes.

• Monitor grievances and absences.

TUPE compliance shouldn’t be a headache

TUPE is about people as much as paperwork. Our HR software gives you tools and expertise to handle both.

• Centralise documentation: store consultation notes, letters, and acknowledgements.

• Secure data transfer: protect employee information under GDPR.

• Stay alert: automated reminders for consultation deadlines and ELI due dates.

• Get answers fast: access CIPD-qualified advisers 24/7 via our employment law advice

Compliance doesn’t have to be complicated when your HR system keeps everything organised.

Smooth transfers, stronger teams

TUPE isn’t designed to trip you up. It’s there to preserve fairness when businesses evolve.
Handled properly, it protects employees, stabilises operations, and builds trust between outgoing and incoming employers.

With the 2025 simplifications and modern HR tech, compliance is achievable even for the smallest organisation.

Plan early. Communicate clearly. Keep records.
And when you need expert guidance, we are ready to help, 24 hours a day, 365 days a year.