If you're selling your business, your team is probably what you think about most after the price. TUPE is the set of rules that decides what happens to them. Its full name is the Transfer of Undertakings (Protection of Employment) Regulations 2006, and in a business sale it's either central or barely relevant, depending on how the deal is done.
This guide explains TUPE from the seller's side, as the rules stand in Great Britain on 19 October 2026. It sits alongside our guide to how to sell a business, and your solicitor will apply the detail to your own sale.
What TUPE means
TUPE protects employees when the business they work in, or part of it, moves to a new employer. It also covers service contracts that move to a new contractor, but for an owner selling a business, the business transfer is the part that matters. It applies whatever the size of the business. When it applies, the employees' jobs usually move to the new employer, and they keep their terms and conditions and their continuity of employment.
Share sale or asset sale decides whether TUPE applies
There are two ways to sell a company's business, and they treat your team very differently. Our guide to share sales and asset sales covers the rest of the comparison.
| What changes | Share sale | Asset sale |
|---|---|---|
| Who employs your team afterwards | Your company, now owned by the buyer | The buyer |
| Does TUPE apply | Usually not | Usually yes |
| Employment contracts | Carry on unchanged | Move to the buyer on the same terms |
| Duty to inform and consult under TUPE | None | Yes, before the transfer |
| Employee liability information | Not required | At least 28 days before the transfer |
In a share sale the buyer buys your shares, and the company carries on employing everyone. GOV.UK says the identity of the employer must change for TUPE to protect staff in a business transfer, and Acas says TUPE isn't likely to apply to a transfer of shares only. The buyer still takes on the company's whole history with its staff, because it now owns the company.
Two things to watch. If the buyer later moves your team into one of its own companies, that later move can be a TUPE transfer with its own duties. And if you're a sole trader or a partnership, there are no shares to sell, so a sale of your business is an asset sale and TUPE will usually apply.
Who and what transfers in an asset sale
Everyone employed in the business being sold, and assigned to it, moves to the buyer automatically when the sale completes. Acas is clear that an employer can't choose which employees transfer. TUPE can apply to a business with a single employee, and it may also protect some workers who aren't employees.
Their contracts carry on as if they'd always been made with the buyer. So the buyer takes on the following.
- Their pay, hours, holiday and other terms, including terms in a staff handbook.
- Their start date, so their length of service is unbroken.
- Wages, bonuses and holiday that are owed but not yet paid or taken.
- Liability for what happened before the sale, such as a discrimination claim.
- Any collective agreement with a trade union you recognise.
A few things don't move. Criminal liability stays with the seller, and so do rights to old age, invalidity and survivors' benefits in an occupational pension scheme, which are covered below.
Because the buyer inherits your history with your staff, expect close questions in due diligence, warranties about your employees in the sale agreement, and indemnities for anything that happened before completion. Acas suggests the two employers agree indemnities with each other.
Employee liability information, at least 28 days before
Regulation 11 requires the seller to give the buyer information about every employee who's transferring, in writing or in a form the buyer can readily get at, at least 28 days before the transfer. If special circumstances make that impossible, it must be given as soon as reasonably practicable. It has to be correct as at a date no more than 14 days before you send it, and you must tell the buyer about any changes afterwards. It covers the following.
- Each employee's identity and age.
- The particulars in their written statement of employment.
- Disciplinary action and grievances in the last two years.
- Claims they've brought in the last two years, and any you reasonably expect.
- Any collective agreement that will carry on after the transfer.
If you miss the deadline or get it wrong, the buyer can claim compensation at an employment tribunal. The award is normally at least £500 for each employee concerned, and the tribunal takes account of what your sale agreement says about it.
Staff details are personal data, and the Information Commissioner's Office expects data protection to be considered as part of due diligence. Share anonymised information while the deal is uncertain, and the named details once it's firm.
Informing and consulting your staff
Regulation 13 requires each employer of affected employees to tell their representatives, long enough before the transfer to allow consultation, about these things.
- That the transfer is happening, when, and why.
- Its legal, economic and social implications for them.
- Any measures the employer plans in connection with it, or that there are none.
- For the seller, any measures the buyer plans for the staff who transfer.
- How many agency workers the employer uses, where, and on what work.
Measures are changes such as new pay dates or new working patterns. The buyer must tell you what it plans in time for you to pass it on. Where measures are planned, the employer taking them must consult with a view to reaching agreement. It must consider what the representatives say and reply, giving reasons if it rejects anything.
Affected employees are a wider group than the staff who are moving. They include anyone at the seller or the buyer who may be affected by the transfer or by measures taken because of it. There's no fixed notice period, Acas says, but it has to be early enough to consult. That's the biggest practical difference from a share sale, where staff are often told on completion day. In an asset sale, your team will know before the deal is done, so plan the timetable around it.
Who you inform and consult
If you recognise a trade union for the affected staff, you deal with its representatives. If not, you can use existing employee representatives who have authority to act on this, or invite the affected staff to elect representatives for the purpose.
The rule for smaller businesses
For transfers on or after 1 July 2024, an employer can inform and consult each affected employee directly, without an election, if there are no representatives, it hasn't already invited staff to elect any, and either it employs fewer than 50 people or fewer than 10 employees are transferring. Before that date, the direct route was open only to employers with fewer than 10 employees. The test applies to each employer separately, so the buyer may need representatives for its own staff even if you don't.
If it isn't done properly
Employees or their representatives can bring a claim. Since 1 October 2026 they have six months from completion to do so, up from three. A tribunal can award up to 13 weeks' pay for each affected employee, and Acas notes the pay used isn't capped. The buyer is jointly liable with the seller for an award made against the seller, which is one reason buyers ask for indemnities. You may want one back for the buyer's side of the duty.
Dismissals and the reason for them
If an employee of the seller or the buyer is dismissed, before or after the transfer, and the sole or main reason is the transfer itself, the dismissal is automatically unfair.
A dismissal can be fair if the main reason is an economic, technical or organisational reason entailing changes in the workforce, usually called an ETO reason. Genuine redundancies and a change of workplace can qualify. The normal rules on fair dismissal still apply, including a fair process and any redundancy pay.
Buyers sometimes ask the seller to make staff redundant before completion, so they take on a smaller team. Take advice before you agree. If the transfer is the main reason for a dismissal, it's automatically unfair, and the liability for it usually passes to the buyer anyway. Sale agreements often deal with who bears that cost.
To claim unfair dismissal, an employee usually needs two years' service. The government intends to cut that to six months from 1 January 2027, and to apply it at once to anyone who has six months' service by then. After that, most of a transferring team will be able to claim if a dismissal around the sale is handled badly.
An employee who doesn't want to transfer can object. Their employment ends at the transfer without counting as a dismissal, so they usually can't claim unfair dismissal or redundancy pay. If the transfer would make their working conditions substantially worse, to their material detriment, they can resign and treat it as a dismissal.
Changing terms after the sale
A change to a transferring employee's contract is void if the main reason for it is the transfer, even if the employee agrees. Changes are allowed if the contract already permits them, or if the main reason is an ETO reason and the employee agrees. Terms that come from a collective agreement can be renegotiated after one year, provided the overall package is no less favourable. Improvements can be agreed with the employee.
This matters to you if you're staying on, or if part of your price depends on how the business does after the sale. A buyer can't move your team onto its own terms just because it now owns the business, and any savings it was counting on may take longer to arrive.
Pensions, in outline
Rights in an occupational pension scheme relating to old age, invalidity or survivors don't transfer under TUPE. Pension built up before the transfer is protected, but the buyer doesn't have to continue an identical scheme.
Pensions law sets a floor. If the seller ran an occupational scheme that the employee was in, or could have joined, the buyer must offer pension cover. Where that's a money purchase scheme, the buyer generally has to match the employee's own contributions up to 6% of pay, or match what the seller was required to pay.
Contributions you're contractually bound to make to an employee's personal pension are different. Acas says they transfer to the buyer like any other contractual term. Pensions are where TUPE gets technical fastest, so ask your accountant and solicitor to check your arrangements early.
Planning TUPE into your sale
- Settle early whether it's a share sale or an asset sale, because it changes when staff hear.
- Work back from completion. Employee liability information is due at least 28 days before, and informing and consulting, with any elections, must start in time to finish before the transfer.
- Agree in heads of terms who tells staff and when. Agree how indemnities will work at the same time.
- Check every employee has an up to date written statement, so your information is right.
- Agree how wages, holiday pay and bonuses built up before completion are split.