There are two types of transfers under the Transfer of Undertakings (Protection of Employment) Regulations 2006, SI 2006/246 (TUPE 2006).
Business Transfers: where the whole or part of a business transfer and retains its identity after the transfer.
Service Provision Changes: where there is a change in the provider of a service, for example, outsourcing, provided that the activities are fundamentally the same as before.
Where there is a relevant transfer, the contracts of employment of those employees assigned to the transfer automatically transfer. Those employees will retain their existing terms and conditions. The new employer acquires all rights and duties under those contracts of employment and liability for all pre-transfer acts and omissions in relation to the old employer.
The new employer may wish to harmonise the terms and conditions of employees inherited from the transfer with those of their existing workforce. However, there are restrictions imposed on the employer trying to vary those contractual terms. Where there is a substantial change, employees could be entitled to resign and claim unfair constructive dismissal and/or wrongful dismissal.
The old and new employers have certain obligations to inform trade unions or elected employee representatives of any employees who may be affected by the transfer and consult on any measures taken in connection with it. Businesses with fewer than 10 employees may be able to inform and consult directly with affected employees where there is no recognised trade union nor any existing appropriate representatives. A failure to comply with these obligations could result in liability to pay compensation. The old employer must also provide the new employer with certain information about the transferring employees at least 28 days before the transfer.