Tips for TUPE: Who transfers?

Written by Sam Dow | 24th July 2025

There are many reasons why a business, or part of it, will transfer to another organisation. You might decide to sell your business, acquire a new one, or outsource part of its operation. Perhaps you want to release equity in your company? Or maybe business is booming so you decide to buy out a competitor. Perhaps a client has decided to use a new service provider and so the operation moves to a new company.

Whatever the reason for a change, if you’re buying, selling, outsourcing, transferring or merging any part of your business, you should be aware of the rules in place to protect the interests of the employees who may be affected by the change. That’s where TUPE comes in.

What is TUPE?

TUPE or ‘Transfer of Undertakings (Protection of Employment) Regulations 1981’ essentially protects your existing employees if you transfer the work they do to another organisation. It ensures that their employment also transfers and protects their terms and conditions of their employment so they have the same pay rate, holiday allowance and other contractual benefits, as well as protecting their continuity of service after they’ve transferred to a new employer.

TUPE legislation stipulates that affected employees must be informed about the transfer before it happens, and then consulted on any possible changes that might happen after transfer, such as a change in working location, pay date or hours of work, or the possibility of future redundancy.

Previously employers were required to consult with employee representatives; either existing union or employee reps or those elected specifically for the TUPE process. However new TUPE rules came into force on July 1, 2024, which specify that if your business has fewer than 50 employees, you can consult directly with affected employees. This also applies to businesses of any size which is transferring fewer than 10 employees, provided no existing employee representatives are already in place.

Who is protected under TUPE?

It’s important to identify which individuals will be affected and protected by TUPE. Accepting the transfer of employees will be additional resource and cost to the new organisation, and so they will want to be sure that they are only receiving those employees that are protected. There are two primary criteria to establish if TUPE will apply.

Firstly, employees are in scope of TUPE transfer if they are working in the part of the organisation or operation that will transfer. For some it will be obvious that their employment should transfer, as their activities and duties are clearly the ones that will be transferring. For others, who may spend only part of their time working on those activities, it may be less certain and this will need close analysis.

Secondly, only direct employees have TUPE protections and will transfer. Agency workers who are not employed by the transferring organisation (transferor) will not automatically transfer to the new organisation (transferee). If you employ casual workers who you believe are not full employees, their terms and status should be explored before deciding whether or not they will fall into scope of TUPE.

If employees are on temporary secondment to the operation that is transferring, or who usually work there but are seconded somewhere else, this can complicate the situation. Factors to consider include whether they were reassigned in or out of the business during the time of the transfer and the length of their reassignment.

As transferor, you will be required to provide Employee Liability Information (ELI) to the transferee before the transfer takes place. This helps to ensure compliance with the employee’s terms and conditions post-transfer and the transferee has all the appropriate information to be able to manage them effectively.

The ELI should include the transferring employees’ relevant personal information, terms of their employment, any disciplinary or grievance records from the last two years, information relating to any collective agreements and any legal action taken by the employee in the last two years.

Legally, this information must be provided 28 days prior to the transfer. But the sooner it is received the better, to allow more time to consult with the employee(s). Make sure to check with the employee and their manager to ensure the data is correct before being released.

What is the best method for finding out which employees qualify for transfer?

The percentage test has long been a rule of thumb in TUPE. This essentially means that you look at the percentage of working time an employee spends in the transferring business or service. If it is 50% or over, then they transfer.

However, this test has proved controversial and there are tribunal cases that back this up. An employee may well spend over 50% of their time on a particular account or service that is being transferred, but on paper, they might be assigned to another department that is not transferring. It is important then to consider the job description of an employee in their employment contract.

What about employees who are away at the time of transfer?

Under TUPE Regulations, the terms, conditions and benefits of employment must be maintained for transferring employees, including those relating to leave such as holiday, family-related leave and pay, and sickness absence and pay.

Those on holiday or maternity leave for example, who fall into scope for TUPE will still transfer. However things can be more complicated for those on long term sick leave. It is important to distinguish between employees who are temporarily or permanently absent from work.

Employees on short term or temporary absence from work, and expected to return, will transfer and their rights will remain intact with their new employer.

However employees on long term sick leave may not transfer under TUPE if, at the time of the change, there is no prospect of them ever being able to return to work. It will be important to seek appropriate medical advice for anyone on long term sickness absence when considering who may or may not transfer under TUPE.

At Reality HR, our consultants can work with you to guide you through the complexities of TUPE transfers. Our TUPE HR services offer assistance with every stage of the employee transfer process, including:

• Assessing your situation to determine if TUPE applies
• Planning and managing the TUPE process
• Supporting employee consultations with affected staff in your business
• Guiding and supporting you with employee redundancies

About the author: Sam Dow, Head of Consulting

Sam’s HR expertise is in restructuring and redundancy, employee engagement, implementing HR systems and performance management and development initiatives, alongside day-to-day HR support. 

If you have any questions on TUPE Transfers, feel free to contact our team at info@realityhr.co.uk or call 01256 328 428.