The Transfer of Undertakings (Protection of Employment) Regulations, universally called TUPE, apply when a business or part of one is sold, or when a service is outsourced, brought back in-house or moved between providers. Employees assigned to what transfers move automatically to the new employer.
What transfers with them
Contracts move across largely intact: continuous service, pay, holiday entitlement and most terms carry over. The new employer inherits not just the contracts but also liabilities attached to them, including outstanding claims. Changing terms specifically because of the transfer is heavily restricted, even where the employee agrees.
- Dismissal for a reason connected to the transfer is automatically unfair, subject to narrow exceptions
- Both outgoing and incoming employers must inform and, where measures are envisaged, consult representatives
- Employees can object to transferring, but doing so generally ends their employment without the usual protections
Why it matters when hiring internationally
TUPE is directly relevant to the Employer of Record model, because moving employees between providers, or from a provider onto your own newly incorporated entity, can itself be a transfer. Companies planning to graduate from an EOR to their own UK entity sometimes assume they can simply re-issue contracts on new terms. If TUPE applies, they cannot, and the existing terms and service follow the employees across.
The equivalent protections exist across the EU under the Acquired Rights Directive, implemented differently in each member state, so the same question arises well beyond the UK.