TUPE
Transfer of Undertakings regulations protecting employees' rights when a business or part of it transfers to a new owner.
Full Definition
TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) is UK legislation protecting employees when a business transfers to a new owner. It implements EU Acquired Rights Directive provisions.
When TUPE applies:
- Business or undertaking transfers to new owner
- Service provision changes (outsourcing, insourcing, re-tendering)
- Relevant employees "assigned" to transferring business
Key TUPE protections: 1. Automatic transfer: Employment contracts transfer automatically 2. Preserved terms: Existing terms and conditions protected 3. Dismissal protection: Dismissal for transfer reason is automatically unfair 4. Collective agreements: Transfer with the business 5. Recognition: Trade union recognition transfers
Employer obligations:
- Inform and consult employee representatives
- Provide employee liability information to buyer
- Liability for failure to inform/consult
- Joint liability period post-transfer
Exceptions and limitations:
- Pensions (occupational schemes excluded)
- Criminal liabilities don't transfer
- Share sales (no business transfer, TUPE doesn't apply)
- ETO reasons may justify changes post-transfer
UK M&A implications:
- Due diligence must identify TUPE risks
- Employee liability information exchanged
- Consultation timeline affects transaction timetable
- Warranties/indemnities for TUPE compliance
Related Terms
Asset Purchase
A transaction where the buyer acquires specific assets and liabilities of a business rather than its shares.
Due Diligence
The comprehensive investigation and analysis of a target business before completing an acquisition.
Warranties
Contractual statements by the seller about the business, breach of which may entitle the buyer to damages.
Acquisition
The purchase of one company by another, where the acquiring company takes control of the target business.