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I’m selling or buying a business for the first time and I’ve heard about “TUPE”. What’s it all about?

“TUPE” stands for the Transfer of Undertakings (Protection of Employment) Regulations. It is a powerful piece of law designed to protect employees when a business changes owner, including against changes being made to terms and conditions of employment.

The size of the business doesn’t matter. When TUPE applies, the employees’ jobs, their terms and conditions, and continuity of employment all transfer across to the new employer.

TUPE can be complex, so we suggest taking specialist advice from our team at an early stage if you’re looking at any deal where the employer is likely to change. In particular, there are significant financial penalties for failing to consult and inform employee representatives or trade unions; and it is important for the buyer to understand risks associated with the transferring employees, including the limitations on changing terms. A seller must also be aware of the employee information they are obliged to provide to a seller and the timescales for doing so.

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