TUPE transfers: a practical guide for small employers and charities

Most business owners hear about TUPE for the first time when it's already happening to them.

A contract changes hands. A service gets brought in-house. Two organisations merge. And suddenly there's a set of legal obligations that didn't exist yesterday, with timelines that don't leave much room for getting up to speed.

TUPE, the Transfer of Undertakings (Protection of Employment) Regulations 2006, exists to protect employees when the business or service they work in transfers to a new employer. The incoming employer inherits the employees on their existing terms and conditions. You can't cherry-pick who you want. You can't change their contracts just because they've moved across. And you can't dismiss anyone because of the transfer itself.

That last point is where most problems start.

When TUPE applies

There are two types of transfer. A business transfer is the straightforward one: a business or part of a business moves from one owner to another. An acquisition, a merger, or a management buyout will usually trigger it.

The second type catches more people out. A service provision change happens when a contract for services moves from one provider to another, or when a client brings a previously outsourced service back in-house. This is where charities and social enterprises get caught most often. You lose a local authority contract. The new provider takes over. The staff who were delivering that service transfer across, whether the new provider wants them or not.

It also works in reverse. You win a contract and suddenly inherit a team you didn't recruit, on terms you didn't set, with employment histories you need to honour.

What you're required to do

The outgoing employer has to provide Employee Liability Information to the incoming employer at least 28 days before the transfer. This includes employment particulars, disciplinary and grievance records from the last two years, any ongoing legal claims, and details of collective agreements. In practice, this information is often incomplete, late, or both. That doesn't remove the obligation. It just means you're working with gaps.

Both employers have a duty to inform and consult with affected employees or their representatives. If there are recognised trade unions, consultation goes through them. If not, you need to elect employee representatives. The consultation has to be meaningful. Telling people what's happening on the day it happens isn't consultation. It's notification, and it's a breach.

Where it goes wrong

The most common mistake is assuming TUPE doesn't apply. A founder acquires a small team from a competitor and treats it as a fresh start with new contracts. A charity wins a service contract and assumes the staff come with a clean slate. Both wrong. Both expensive if challenged.

The second most common mistake is trying to change terms and conditions shortly after the transfer. TUPE protects employees' existing terms. You can't reduce someone's pay, change their hours, or remove a benefit because they've transferred. Any change that's connected to the transfer itself is automatically unfair, even if the employee agrees to it. There are very limited exceptions where an economic, technical, or organisational reason justifies a change, but the bar is high and the burden of proof sits with the employer.

The third is poor consultation. Failing to consult properly can result in a protective award of up to 13 weeks' uncapped pay per affected employee. For a charity transferring 15 people, that's a significant financial exposure for a procedural failure.

What good looks like

Start early. As soon as you know a transfer is likely, get advice on whether TUPE applies and what your obligations are. Don't wait for certainty. By the time it's confirmed, you've often lost the window to consult properly.

Get the Employee Liability Information requested and reviewed well before the 28-day deadline. If the outgoing employer is slow, put the requests in writing and keep chasing. You want a paper trail that shows you tried.

Plan the consultation properly. Identify who needs to be consulted, elect representatives if needed, and build in enough time for genuine dialogue. Employees have the right to ask questions and raise concerns, and you need to be able to show you considered them.

And be honest about what you know and what you don't. A transfer is unsettling for the people going through it. The organisations that handle it well are the ones that communicate early, communicate clearly, and don't pretend they have answers they don't have yet.

Charities and TUPE: a specific note

If you operate in the charity or social enterprise sector and you deliver services under contract, TUPE is not a niche issue. It's a regular feature of how your workforce moves. Every commissioning cycle, every contract renewal, every service redesign has the potential to trigger a transfer.

The problem is that many smaller charities don't have the HR infrastructure to manage it. They find out TUPE applies, Google it, get overwhelmed by the legal language, and either panic or ignore it. Neither response ends well.

If you're facing a TUPE transfer and you're not sure where to start, it's worth getting advice before the process begins rather than trying to unpick it afterwards. A short conversation at the right time can save a significant amount of cost and stress later.

Book a free discovery call with King HR Advisory to talk through your situation.