TUPE — your rights when your employer changes

When your business is sold, merged, or outsourced, TUPE law protects your job. Your contract transfers automatically — and you cannot be dismissed simply because of the change.

TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246). It's a law that protects your job and pay when your employer changes — either through a sale, merger, or outsourcing of your department. Your employment automatically transfers to the new employer on the same terms. TUPE overrides the employer's ability to dismiss you purely because of the change of ownership.

When does TUPE apply?

TUPE applies when there is a "transfer of an undertaking." This happens when your business (or part of it) is transferred to a new owner while continuing the same operations. Common examples: a company being sold; outsourcing of facilities management, IT, or payroll; a franchise changing hands. TUPE does not apply to the sale of assets alone (without employees transferring) or if the business closes entirely.

What happens to my contract when TUPE applies?

Your contract automatically transfers to the new employer. All your terms and conditions (salary, hours, benefits, pension, notice period) remain the same. You cannot be forced to sign a new contract with different terms. However, the new employer can change terms for "economic, technical or organisational" reasons connected to the transfer — but changes purely because of the transfer are protected as unfair dismissal.

Can I be dismissed because of a TUPE transfer?

No. Dismissal because of the transfer itself is automatically unfair, even if you're within probation or don't have two years' service. The only exception is if the new employer has an "economic, technical or organisational" (ETO) reason for the dismissal — and even then, it must be a genuine, documented reason and proportionate. A redundancy can be fair if real circumstances justify it, not just the transfer.

What's the ETO defence?

"Economic, technical or organisational" reasons are the only justification for dismissing someone in a TUPE transfer. Economic reasons might include genuine cost-cutting post-transfer. Technical reasons might be replacing outdated systems. Organisational reasons might be restructuring roles to reduce duplication. However, cost-cutting alone (wanting to pay less) is not a legitimate ETO reason. The new employer must show the change was necessary, not just convenient.

What if my employer didn't inform me about the transfer?

The employer must inform you (and any recognised union) about a TUPE transfer early enough to allow consultation. Failure to do this is a breach of TUPE law. You can claim compensation for the failure to consult — up to 13 weeks' wages, or more if you've been dismissed. Even if you weren't told, your contract still transfers; the remedy is compensation for the information failure.

What if the new employer says I need to sign a new contract?

You do not have to sign a new contract. Your existing contract transfers automatically. If the new employer insists on new terms, you can refuse. If they dismiss you for refusing to sign new terms (that worsen your position), that's unfair dismissal. If the new terms are better, you can accept them, but you're not obliged to. Signing a new contract doesn't give them the right to change core terms.

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What is TUPE and when does it apply?

TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations 2006.

It protects you when your business changes hands while continuing the same operations.

When TUPE applies, your employment contract automatically transfers to the new owner. You keep your job, your pay, your hours, and all your existing terms. The new employer steps into the shoes of the old employer — they cannot dismiss you purely because they have taken over.

Your company is sold to a new owner. The buyer acquires both assets and employees.

Merger or acquisition

Two companies merge, or one acquires another. TUPE applies if operations continue under the new structure.

Your department (e.g., IT, HR, facilities) is outsourced to an external contractor. Your work transfers to the contractor.

A franchise or service provider (e.g., catering, cleaning) is replaced. Employees transfer to the new provider.

TUPE does NOT apply if the business is liquidated or closed entirely, or if only assets (not the business operation) are sold. It also does not apply if the new owner does not continue the same work or fundamentally changes the nature of the operation.

The key test: is the business (or a distinct part of it) being transferred as a going concern? If yes, TUPE applies, and your contract transfers automatically.

What stays the same when your contract transfers

When TUPE applies, your employment contract transfers automatically. You do not need to sign anything new — the transfer happens by operation of law.

Everything about your employment stays the same:

Your pay, hours, and any bonuses or commissions remain unchanged.

Notice period, leave entitlement, and all other terms continue unchanged.

Your service with the old employer counts towards service with the new owner (for redundancy, notice periods, etc.).

Pension and benefits

Existing pension rights are protected. The new employer must offer the same or equivalent benefits.

Unused holiday pay, maternity rights, and other accrued rights transfer to the new employer.

The new employer cannot unilaterally change your contract terms just because they have taken over. They can only change terms for genuine "economic, technical or organisational" reasons — and even then, the change must be proportionate and justified.

Protected against dismissal — the TUPE shield

Under TUPE (regulation 7),

you are protected against dismissal simply because of the transfer. If you are dismissed before or after the transfer, and the reason is the transfer itself, the dismissal is automatically unfair — even if you have less than two years' service.

This is powerful protection. Normally, you need two years' service to claim unfair dismissal. In a TUPE transfer, the protection applies from day one.

The only exception: Economic, Technical, or Organisational (ETO) reasons

The new employer can dismiss you if they have an "economic, technical or organisational" reason, even if it is connected to the transfer. But this must be:

• Genuine and documented (not just claimed retrospectively)
• Not just cost-cutting or wanting to pay less
• Proportionate and fairly handled

Examples of potentially legitimate ETO reasons:

• • A genuine redundancy where roles are duplicated post-transfer and there is a real business need to reduce headcount
• • Relocating the office to a new town (technical/organisational reason)
• • Restructuring systems or processes that require different skills or fewer staff
• • Genuine cost savings where the new employer cannot afford to keep all staff at the original salary

Simple cost-cutting ("we want to save money so we are cutting your pay") is NOT a legitimate ETO reason. If the new employer dismisses you to save costs or simply because they can get cheaper labour, that is automatically unfair dismissal.

Your rights during a transfer

During a TUPE transfer, you have specific rights:

Right to information

Your employer must inform you about the transfer — who the new employer is, how it will affect your employment, and any measures they intend to take. This must happen early enough to allow genuine consultation.

Right to consultation

You have the right to be consulted about the transfer and any changes to your employment. The employer must engage with you in good faith. Failure to consult is a breach of TUPE law.

Right to refuse new terms

If the new employer tries to force you to sign a new contract with worse terms, you can refuse. Dismissing you for refusing to accept worse terms is unfair dismissal (unless there is a genuine ETO reason for the change).

Right to claim compensation

If you are dismissed because of the transfer, or if the employer fails to consult or inform you, you can claim unfair dismissal and/or compensation for breach of TUPE. Compensation is at least 13 weeks' wages, or more if the breach is serious.

You can raise concerns, ask questions, and refuse to accept changes that breach TUPE. But you are expected to continue performing your work during the transfer — refusing to work simply because ownership has changed is not a protected position.

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