Transfer of undertakings – employment contracts

The process of transferring staff to a new employer as a result of a transfer of a business or undertaking, or a part of one is regulated by the Transfer of Undertakings (Protection of Employment) Regulations 2006, known as the TUPE Regulations. Its aim is to preserve the continuity of employment of those employees who are subject to the transfer.

The main prerequisite of the Regulations is that employees employed by the previous employer automatically become employees of the new employer when the transfer takes place. Terms and conditions included in their contracts of employment remain unchanged, with the exception of certain occupational pension rights. The new employer is obliged to take over all the contracts of employment of all permanent employees. The contracts cannot be terminated just as a result of the transfer.

The new employer also takes over all the rights and obligations arising from these employment contracts, including outstanding liabilities of the previous employer, such as breach of contract or sex discrimination which occurred before the transfer took place.

The Regulations describe circumstances when it is possible for the previous or new employer to vary terms and conditions of employment contracts. More information can be found on ACAS website.