UK TUPE reform in focus: An opportunity to have your say

With the UK Government’s call for evidence on the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) underway, this briefing examines some of the main challenges facing employers under the current UK regime and considers the approaches to key elements in other European jurisdictions.

UK Government call for evidence on TUPE

TUPE protects employees where a business transfers by preserving employment, transferring rights and liabilities, and restricting transfer-related dismissals and changes to terms and conditions of employment. A key feature of the UK regime is its scope. As well as traditional business transfers, it covers service provision changes, where activities move between providers but remain broadly the same, and there is an organised grouping of employees carrying them out.

The UK Government’s call for evidence invites employers and other stakeholders to share their experiences and insights on how TUPE operates in practice, with a view to identifying areas that work well and those that may need reform. This sits within the wider Make Work Pay agenda, aimed at strengthening workplace rights while keeping the labour market workable for employers.

The current UK TUPE regime

TUPE is increasingly difficult to apply, particularly in modern multi-provider outsourcing, fragmented services, and cross-border or remote delivery models. The UK government acknowledges this, stating in the call for evidence that it wants “to ensure that TUPE is as efficient as it can be, that it’s easy to follow for businesses, and easy to understand for employees, too”.

There have been some limited procedural reforms to TUPE in recent years, including more flexibility to consult directly with employees in certain smaller transfers. But these are relatively modest changes and do not address some of the bigger issues that arise in practice, including:

• Fragmentation and assignment of employees: Case law such as McTear Contracts Ltd v Bennett & Ors has highlighted the complexity when services are split between multiple providers. It is now clear that employees can, in some cases, end up with more than one employer, making it harder to determine who transfers and increasing uncertainty for all parties
• Service provision change: There is ongoing uncertainty about when TUPE applies to outsourcing, insourcing, and retendering. Tribunals and courts have repeatedly addressed what counts as an “organised grouping of employees” and whether activities remain “fundamentally the same” after a change
• Changing terms and conditions post-transfer: TUPE restricts changes to employment terms if the sole or principal reason is the transfer (unless an ETO reason can be established). Case law continues to reinforce how difficult it is to harmonise terms of employment
• Worker status and coverage: There is still legal uncertainty about whether TUPE covers “workers” as well as employees. Some tribunal decisions suggest workers may be protected, but this remains unsettled and is a practical concern for employers dealing with mixed-status workforces

Case law continues to highlight just how fact-sensitive TUPE analysis is, leaving employers without a straightforward test for determining when and how TUPE applies in practice, and requiring careful assessment of the specific circumstances in each case.

The Employment Rights Act 2025 (ERA) does not directly amend TUPE, but some of its measures will have an impact on TUPE transfers and related issues. In particular, the public sector outsourcing provision will apply where certain workers are transferred from the public to the private sector and work alongside private sector employees, and is aimed at both sets of workers not being treated less favourably. Changes to collective consultation obligations and fire and rehire practices will impact attempts to reorganise a workforce or achieve harmonisation of terms and conditions pre or post-TUPE transfer.

The issues identified above map directly onto the government’s core areas of inquiry in the call for evidence, namely the clarity of when TUPE applies, the effectiveness of its operation in practice, and whether it strikes the right balance between employee protection and business flexibility.

How does the UK compare?

When comparing TUPE in the UK to equivalent laws in other jurisdictions, it is clear that the UK casts the net wide, while many other countries apply frameworks derived from the Acquired Rights Directive more sparingly but more rigidly. We have compared three key areas below in a few sample jurisdictions. See our Global Employment and Pensions app to explore other jurisdictions.

Issue	UK	France	Germany	Netherlands
Trigger for protection	TUPE can apply to business transfers and to service provision changes, including outsourcing, insourcing, and re-tendering where the statutory conditions are met.	No UK-style service provision change rules; the test is whether an “economic entity transfers and retains its identity”. Certain sector-level collective bargaining agreements might impose a TUPE transfer, even when conditions are not met.	No UK-style service provision change rules; the focus is on whether an economic entity transfers and retains its identity. The distinction between labor-intensive and asset-intensive businesses is relevant in this context, but in all cases an assessment of all factors is necessary.	There are no UK-style service provision change rules; the focus is on whether an economic entity transfers and retains its identity. The distinction between labor-intensive and asset-intensive businesses is a relevant factor. However, all criteria of whether the entity retains its identity should be assessed.
Information and consultation	Obligations to inform and consult can capture affected employees beyond the transferring group, and failure to comply can result in protective awards.	Consultation requirement in all companies of at least 50 employees and with a works council. Failure to consult the works council is a criminal offence. No statutory requirement to send individual information letters to transferring employees (although recommended).	Consultation requirements only if there is a works council and a “change in establishment”. Individual, detailed information letters must be sent to all transferring employees in all cases. Only once this has been complied with will the one-month period for employees to decide whether they want to object to the transfer start to run.	Duty on both the transferor and the transferee to inform employees, in good time, of the transfer, its consequences and any proposed measures in relation to the transfer; and, where a works council is established, an obligation to consult and seek its prior advice at a time where the advice can still meaningfully influence the decision. In addition, the Dutch SER Merger Code may require prior notification to trade unions.
Post-transfer changes	Enhanced protection against dismissal over and above general unfair dismissal law. Significant restrictions on transfer‑related changes to terms and conditions, subject to limited ETO exceptions (even where employee consent is given, which can be considered void). Changes to individual terms from a collective agreement permitted after one year.	Dismissals by reason of the transfer are prohibited, and post‑transfer changes to terms and conditions are highly restricted: changes generally require employee consent. Collective bargaining agreements applicable at the transferor are automatically called into question upon transfer and continue to apply for a maximum period of 15 month, unless replaced by a substitution agreement negotiated with the transferee.	Dismissal because of transfer is void. Change of terms by agreement is usually possible (except former collective terms for one year after transfer if detrimental change).	Dismissal because of transfer is prohibited. However, dismissal for economic, technical or organisational reasons that entail changes in the workforce remains possible, provided the applicable substantive and procedural requirements are met. Changes to terms of employment solely because of transfer are likewise prohibited, but changes by agreement are usually possible provided that consent is freely given and the change is not causally linked to the transfer itself. Applicable collective bargaining agreements continue to apply to transferring employees until they expire or are replaced by a new collective bargaining agreement at the transferee.

 

Overall, this high-level comparison highlights that the UK’s TUPE regime is broader in scope and arguably “gold plated” as a result, and that it is also arguably more complex and uncertain to apply in practice, especially when contrasted with the tests seen in jurisdictions such as France, Germany and the Netherlands. These differences go directly to the issues identified in the call for evidence, including whether the UK regime remains fit for purpose in modern labour markets. 

Further reading

Employment Rights Act tracker
Global Employment and Pensions app to explore other jurisdictions
Call for Evidence on Transfer of Undertakings (Protection of Employment) Regulations