Corporate law update: 4 - 17 April - Macfarlanes

Government consults on TUPE regulations

The Government has launched a call for evidence on the Transfer of Undertakings (Protection of Employment) Regulations 2026, more commonly known as “TUPE”.

In broad terms, TUPE applies whenever there is:

a transfer of a business, or part of a business, from one employer to another; or

a change in the provider of a service (for example, when one contractor is replaced by another contractor, or when a service previously provided by a contractor is brought “in-house”).

The effect of TUPE (where it applies) is that the contract and the terms and conditions of employment of each affected employee are automatically transferred to the new employer, and the employee’s continuity of employment (e.g. for the purposes of unfair dismissal or redundancy) is preserved. The new employer also assumes liability for any failure to observe the employee’s employment rights.

On a business transfer, employees transfer to the organisation acquiring the business. On a service provision change, they transfer to the new service provider. Certain criteria must be met, and there are exceptions, and so TUPE does not apply to every transfer or service provision change.

The new employer cannot change employees’ terms and conditions if the reason for doing so is the TUPE transfer itself. Instead, it must identify an “economic, technical or organisational” (ETO) reason involving changes in its overall workforce or workplace.

The call for evidence seeks views on various aspects of TUPE, including:

whether TUPE currently strikes the right balance between supporting employer needs and protecting employment rights;

the extent to which TUPE adequately protects transferring employees’ employment rights, as well as collective agreements and pension rights;

the extent to which TUPE adequately provides for consultation with transferring employees, as well as the process of a TUPE transfer more generally;

whether it is sufficiently clear what amounts to a transfer that triggers TUPE;

how the TUPE process could be made more efficient for employers and strengthened to better protect employees, as well as views on the concept of an “ETO reason”;

the costs and impact of a TUPE process; and

the impact of TUPE on individuals with protected characteristics under the Equality Act 2010.

The call for evidence closes on 1 July 2026.

Read the Government’s call for evidence on the TUPE Regulations 2026 (opens PDF)