TUPE vs Redundancy
Last updated: February 2025
Quick Comparison
| Aspect | TUPE Transfer | Redundancy |
|---|---|---|
| Outcome for employees | Employment continues with the new employer | Employment ends with redundancy payment |
| Trigger | Transfer of a business, undertaking, or service provision | Reduced need for employees to do particular work |
| Terms of employment | Preserved; transfer on existing terms | Employment terminates; new role would be on new terms |
| Consultation | Mandatory information and consultation with representatives | Individual consultation always; collective if 20+ employees |
| Unfair dismissal | Dismissal by reason of transfer is automatically unfair | Redundancy is a fair reason if proper process is followed |
What Is a TUPE Transfer?
The Transfer of Undertakings (Protection of Employment) Regulations 2006 protect employees when a business or service provision changes hands, automatically transferring employment.
Key Features
- • Employees automatically transfer to the new employer
- • Terms and conditions of employment are preserved
- • Dismissal connected to the transfer is automatically unfair
- • Both old and new employers must inform and consult affected employees
Best For
- • Business sales and mergers
- • Outsourcing, insourcing, and retendering of services
- • Protecting employees when a business changes ownership
What Is a Redundancy?
A fair reason for dismissal when an employer's requirement for employees to do work of a particular kind has ceased or diminished.
Key Features
- • Genuine reduction in the need for employees to do particular work
- • Fair selection criteria must be applied
- • Statutory redundancy pay for employees with 2+ years service
- • Collective consultation required for 20+ redundancies in 90 days
Best For
- • Reducing headcount due to business restructuring
- • Closing a business or location
- • Reorganisations reducing the need for certain roles
When to Use a TUPE Transfer
TUPE applies automatically when there is a relevant transfer. It is not a choice. If you are acquiring a business, taking on a contract, or outsourcing services, check whether TUPE applies and comply with all obligations.
When to Use a Redundancy
Use redundancy when there is a genuine reduction in the need for employees. This must not be used as a device to avoid TUPE obligations. If TUPE applies, you cannot make employees redundant solely because of the transfer.
Which Does Your Business Need?
TUPE and redundancy are not alternatives in most cases. TUPE applies automatically in transfer situations and employees must transfer. Redundancy may be appropriate after a transfer if there is a genuine economic, technical, or organisational reason entailing changes in the workforce, but not simply because of the transfer itself.
FAQ
Can I make employees redundant instead of applying TUPE?
No. If TUPE applies, employees must transfer. Dismissing employees to avoid TUPE is automatically unfair. However, after the transfer, redundancies may be justified if there is a genuine economic, technical, or organisational reason not connected to the transfer itself.
What information must be provided under TUPE?
The old employer must provide employee liability information to the new employer at least 28 days before the transfer. Both employers must inform and consult appropriate representatives about the transfer, its reasons, and any measures planned in connection with it.
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