A guide to TUPE in 2026/27

TUPE can be a complex area for employers, but understanding your responsibilities can make the process much easier. Whether you’re preparing for a business transfer or a change in service provider, it’s important to understand what TUPE could mean for both your business and your employees.

TUPE [pronounced too-pee], it rolls off the tongue better than Transfer of Undertakings (Protection of Employment) which is what it stands for. It is a set of regulations that protects employees if their employer company comes under new ownership.

TUPE is highly likely to apply if your business, or part of your business, transfers from you to another employer whilst retaining the same staff, assets and clients (or vice versa).

It could also apply when you have service provision changes like outsourcing to a contractor, in-sourcing previously outsourced work or reassigning contracts (where organised groupings of employees perform the work and the work remains mainly the same).

At a high level it requires you to retain the existing terms and conditions of employment and maintain their periods of continuous employment. The buyer and seller will need to cooperate to achieve this.

How do the mechanics of TUPE work?

Remember, TUPE will be relevant to you whether you are the buyer or the seller. As mentioned, cooperation is important so whichever role you are playing, you will need to ensure your counterpart is fulfilling their role too.

The seller will need to share employee liability data at least 28 days before the transfer. This will include the terms and conditions of employment, length of continuous service, personal data, payroll information and personnel files. Adherence with data protection law is essential here.

The default position for the buyer is to assume the existing terms and conditions remain permanently. Even reaching agreement with employees if there were to be changes after TUPE may not be sufficient to avoid a breach of contract.

You may have economic, technical or organisational reasons for making changes. But you will still need to inform employees and consult proposed changes with elected representatives of the employees or a recognised trade union. If neither is in place and you employ fewer than 50 employees, or fewer than 10 are transferring, you can consult directly with them.

Will the location of the work change? Will redundancies be necessary because of newly created overlaps between two combining workforces? These are examples of types of change that you would need to inform staff of and consult on. In a redundancy scenario, employees from both workforces would need to be pooled and fairly considered. Whatever a proposed change, it needs to be fully explained and set out in writing. For redundancy, the proper process must still be followed.

What are the consequences for getting it wrong?

TUPE is complicated and there are a number of ways in which you could fall foul. Here are the main scenarios you could face:

• An internal grievance which an employee might raise with you if they feel that TUPE applies but you have not complied with it. Investigating this properly and addressing concerns where required may prevent this escalating.

• Trade union involvement as an alternative pathway for the employee, as above.

• An employment tribunal if you are unable to resolve the matter internally.

• Failure to inform or consult with employees via trade union or elected representative can result in a financial penalty awarded by an employment tribunal of up to 13 weeks’ wages per affected employee.

• New collective redundancy rates apply. Where a TUPE transfer takes place with collective redundancies, be aware that the maximum protective award payable for failing to consult rose on 6 April 2026 from 90 to 180 days of pay. This is separate from, and potentially in addition to, penalties for failing on TUPE consultation duties.

• New fire and rehire rules effective from March 2027, will be relevant to dismissals relating to TUPE. In almost all cases, it will become automatically unfair to dismiss someone for refusing a contractual change that amounts to a restricted variation (like a change in pay, working hours or holiday among other things). Moreover, by then, compensatory awards will have become uncapped, adding further financial risk to you.

How to approach TUPE?

Plan early and take professional advice. The TUPE landscape is getting riskier, and the options available will depend on circumstances. Genuine agreement with employees is important, but may not be sufficient to lawfully worsen their terms and conditions.

Make sure you communicate well with all parties throughout. Keep in mind that problems can materialise for you throughout the process and even beyond, particularly if redundancies are involved.

We can provide you with professional advice and have extensive experience in this area. Our model means we may prove much more cost-effective than taking direct legal advice, but whilst delivering the same professional rigour. Contact us today on 0117 970 2955 or visit our website www.hrdept.co.uk.