Company Sale, Merger, and Redundancy

What is TUPE?

TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations 2006. It is the law that protects employees when a business or part of a business is transferred to a new owner — whether through a sale, merger, or some other form of acquisition.

TUPE means that when your employer changes — because the company is sold, a contract is transferred to a new provider, or a business merger takes place — your employment does not restart. Your existing rights, including your length of service, transfer with you.

Your service continuity under TUPE

This is one of the most important protections TUPE provides: your length of service is preserved. If you have been with your employer for 8 years and then the company is sold, you still have 8 years of service with the new owner. You do not start from zero.

This matters for redundancy because:

• You qualify for statutory redundancy after 2 years of continuous service — this continues to count even after a transfer
• Your weekly pay and age multipliers are calculated using your full service history, including time with the previous employer
• Any enhanced redundancy scheme from the old employer may transfer with you, depending on the terms of the sale

Can you be made redundant after a TUPE transfer?

Yes — TUPE does not prevent redundancy. But it does impose important restrictions:

• Redundancy must be genuinely connected to the transfer — either the reason for the dismissal arises from the transfer, or the reason for the dismissal is the transfer itself
• Economic, technical, or organisational (ETO) reasons — an employer can only dentify a redundancy situation if there is an ETO reason involving changes to the workforce. A purely pretextual dismissal connected to the transfer would be unfair
• Consultation is required — the new employer must consult properly with affected employees before the transfer, or shortly after

If you are dismissed by either the old employer just before a transfer, or the new employer shortly after, for reasons connected to the transfer, and the process was not handled properly — you may have grounds for an unfair dismissal claim.

What your employer must tell you

Both the old employer (the seller) and new employer (the buyer) have legal obligations to inform and consult with employees before a TUPE transfer:

• Employees must be told that a transfer is taking place, in writing, and given enough information to understand how it affects them
• If there are measures planned that will affect employees (such as redundancies, changes to terms, or relocation), affected employees must be consulted before the transfer
• In businesses with 10 or more employees, elected employee representatives must be involved in the consultation process
• If the transfer involves fewer than 10 employees and there are no elected representatives, employers can consult directly with employees

Changing terms after a transfer

The new employer cannot reduce your pay or change your terms simply because they have taken over the business. Your employment contract transfers with you, and the new employer must honour all existing terms.

If the new employer wants to change your terms, they must:

• Negotiate with you and get your explicit agreement
• Have an ETO reason for the change — meaning the reason must be an economic, technical, or organisational one connected to the transfer, not simply a desire to harmonise terms

If you are asked to accept new terms after a transfer, seek advice before agreeing — particularly if the proposed changes reduce your pay or benefits.

What to do if you are made redundant around a transfer

1. Ask for everything in writing — the consultation, the reason for redundancy, the selection criteria, and the calculation of your pay
2. Check your service date — your full service history should transfer and count. If your employer tries to use a shorter period, challenge it
3. Verify your calculation — use our calculator to check whether the payout matches your full service history
4. Seek advice — ACAS (0300 123 1100) offers free, confidential guidance specifically on TUPE situations and redundancy around transfers