TUPE in the Charity Sector: What Boards Get Wrong
TUPE — the Transfer of Undertakings (Protection of Employment) Regulations — isn't something most charity boards think about until it's happening to them. And by then, the timeline is usually tight and the decisions are already being made.
But TUPE comes up in the charity sector more than people realise. When a commissioned service moves from one provider to another. When a local authority contract is retendered. When two charities merge. When a service is brought in-house from an external contractor, or outsourced for the first time. Each of these can trigger TUPE, and each carries legal obligations that most charity boards have never navigated before.
What TUPE actually does
When TUPE applies, employees transfer automatically from the old employer to the new one. Their existing terms and conditions — pay, hours, holiday, contractual benefits, continuity of service — transfer with them. The new employer can't simply offer them new contracts on different terms. They inherit the workforce as it is.
This protects employees from losing their jobs or having their terms downgraded just because a contract changed hands. That protection is important and the principle behind it is sound. But for the charity that's receiving the transfer — often a small organisation with limited HR capacity — the practical implications can be significant.
The mistakes charity boards make
Not recognising that TUPE applies. This is the most common error. A charity wins a new contract to deliver a service that was previously delivered by someone else, and nobody considers whether the staff delivering that service have the right to transfer. By the time someone raises it, the contract start date is two weeks away and there's been no consultation.
Assuming they can change terms and conditions quickly. A charity merges with another organisation and assumes it can harmonise pay, working hours, or job titles shortly after the transfer. Under TUPE, you generally can't change terms and conditions if the sole or principal reason for the change is the transfer itself. There are limited exceptions — genuinely economic, technical or organisational reasons — but these are narrower than most people think.
Failing to consult properly. Both the outgoing and incoming employers have a duty to inform and consult with affected employees — or their representatives — before the transfer takes place. In charities with no union recognition and no existing employee representatives, this means arranging an election of representatives before you can even begin the consultation process. That takes time. If the board doesn't know this, the timeline slips and the charity is exposed.
Not asking for employee liability information. The outgoing employer is legally required to provide detailed information about the transferring employees — their terms, any disciplinary or grievance proceedings, any tribunal claims. If the charity receiving the transfer doesn't request this, or doesn't review it carefully, they can inherit liabilities they didn't know about.
Planning redundancies without understanding the rules. Many charity mergers are driven by a desire to reduce costs — and that often means reducing headcount after the transfer. But making redundancies immediately after a TUPE transfer, where the transfer is the reason for the redundancy, is legally risky. It needs to be grounded in a genuine economic, technical or organisational reason, properly consulted on, and handled with process. "We've got two finance officers and only need one" might feel obvious, but the legal route to getting there safely isn't.
Why charities find this particularly hard
The charity sector has features that make TUPE more common and harder to manage. Services are commissioned on fixed-term contracts that change hands regularly. Mergers between small charities are increasingly common as funding tightens. And the organisations dealing with these transfers often have no internal HR function and no previous experience of TUPE.
Boards are making decisions about mergers and contract bids without understanding that TUPE creates binding employment obligations. By the time they realise, the commitments are already made and the room for manoeuvre has narrowed.
What to do about it
If your charity is involved in any kind of contract change, service transfer, or merger discussion, the question "does TUPE apply?" needs to be asked early — not at the implementation stage. If it does apply, you need to understand what employees are transferring, on what terms, and what your consultation obligations are. You need a realistic timeline that accounts for representative elections if necessary. And you need HR advice from someone who's managed these processes before, not someone reading the regulations for the first time.
We support charities across Sheffield, South Yorkshire and the UK with TUPE transfers as part of our Strategic People Projects service. Whether you're inheriting staff from a contract win, merging with another organisation, or restructuring after a transfer, we can manage the process properly and keep your board informed at every stage.