🇬🇧 UK · Employment Law · Updated 2026-06-27
TUPE vs standard redundancy: different rules, different rights
When a business is sold, outsourced, or a service contract changes hands, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applies — not standard redundancy. TUPE gives you stronger protections than a standard redundancy situation, including automatic preservation of your terms and conditions and special rules around dismissal. Understanding which regime applies to you is essential.
Key differences at a glance
| Aspect | TUPE transfer | Standard redundancy |
|---|---|---|
| Legal framework | Transfer of Undertakings (Protection of Employment) Regulations 2006 (as amended 2014) | Employment Rights Act 1996 (ERA 1996) s.135–s.145 |
| When it applies | Business sale, outsourcing, re-tendering of a service contract, or insourcing (service provision change) | When the employer's need for employees doing your type of work diminishes or ceases |
| Terms and conditions | Automatically preserved — new employer inherits your existing terms exactly. Changes connected to the transfer are void. | No preservation — your terms remain as agreed with your employer; employer can propose changes with proper notice |
| Dismissal | Dismissal connected to the TUPE transfer is automatically unfair (Reg 7), unless there is an ETO reason | Potentially fair if genuine redundancy, with fair selection, consultation, and notice |
| Redundancy pay on dismissal | If dismissal is for a genuine ETO reason (not just the transfer itself), statutory redundancy pay applies as normal | Statutory redundancy pay applies: up to £22,530 with 2+ years' service |
| Consultation obligation | Information and consultation before the transfer with employee representatives; failure = up to 13 weeks' pay per employee (uncapped) | Individual consultation required; 45-day collective consultation if 100+ redundancies |
| Continuous employment | Service years with old employer transfer to new employer — your continuity is unbroken | Redundancy ends employment; new employment starts fresh service count |
| Pension rights | New employer must offer broadly comparable pension — accrued DB pension rights do not automatically transfer | No pension obligation beyond what is owed on termination |
The bottom line
TUPE gives you significantly stronger protections than a standard redundancy. If you are at risk of dismissal around the time of a business transfer or contract re-tender, always establish whether TUPE applies first. If TUPE applies, your employer cannot simply make you redundant because of the transfer — they need an ETO reason unconnected to it. The information and consultation compensation (up to 13 weeks' pay, uncapped) can be substantial if the employer failed to follow the TUPE consultation rules.
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Can I be made redundant under TUPE?
Not because of the transfer itself. Regulation 7 TUPE 2006 makes dismissal automatically unfair if the sole or principal reason is the transfer. However, if the new employer can show an economic, technical, or organisational (ETO) reason entailing a change in the workforce — such as a genuine post-transfer restructuring — dismissal may be fair, provided a fair procedure is followed. The ETO reason must be genuine and not a pretext for dismissal related to the transfer.
How do I know if TUPE applies to my situation?
TUPE applies in two situations: (1) a business transfer — where an economic entity retaining its identity moves from one employer to another (typically a company or division sale); and (2) a service provision change — where a service contract is outsourced, re-tendered to a different contractor, or brought back in-house. If your employer is selling the business or losing/winning a service contract and your role is connected to it, TUPE likely applies.
What is an ETO reason under TUPE?
An ETO (economic, technical, or organisational) reason is one that entails a change in the workforce — a reduction in headcount, a change in the type of roles, or a reorganisation affecting how work is carried out. It must be a genuine business reason unconnected to the transfer itself. A new employer wanting to cut staff simply because they consider the workforce too large for the transferred business is not an ETO reason — that is the transfer. A genuine restructuring to address financial losses that would have happened transfer or not may qualify.
Does my service with my old employer count under TUPE?
Yes. One of the most important consequences of TUPE is that your continuous employment transfers with you. Your service years with the old employer count towards your rights with the new employer — including unfair dismissal qualifying period, statutory redundancy pay entitlement, and notice entitlement. This is the case even if the new employer is a completely different legal entity.
What happens to my pension under TUPE?
Occupational pension rights are only partially protected under TUPE. The new employer must offer a broadly comparable pension scheme — they cannot simply leave you without pension provision. However, your accrued defined benefit (final salary) pension rights do not automatically transfer in the same way as other contractual terms — you remain a deferred member of the old employer's scheme for those accrued rights. Active future pension accrual is governed by the comparable scheme the new employer must provide.