Employers must follow a fair redundancy process throughout a TUPE transfer.
TUPE regulations protect employees' rights when they transfer to a new employer. TUPE stands for Transfer of Undertakings (Protection of Employment).
Before starting a redundancy process, an employer should:
- check if redundancies are needed
- consider how to reduce or avoid them
Before a TUPE transfer
An employer cannot make redundancies before a TUPE transfer if the reasons relate to the transfer. This is the case for both:
- the new employer taking on the transfer
- the old employer making the transfer
For example:
- the old employer cannot reduce the number of employees to make the organisation cheaper to run, to try to find a buyer
- the new employer cannot ask the old employer to make redundancies before the transfer – this would be unfair dismissal
Employers can make redundancies before a TUPE transfer if they are not related to the transfer. They must follow the right process for managing redundancies.
After the transfer
After employees transfer, employers can only make redundancies related to the transfer if there is both:
- a genuine redundancy situation
- an 'economic, technical or organisational' (ETO) reason involving a change in the workforce
A genuine redundancy situation could be where part, or all, of the organisation is:
- closing, or has already closed
- changing the types or number of roles needed to do certain work
- changing location
Economic, technical or organisational (ETO) reasons
ETO reasons include:
- economic reasons – for example, essential cost-saving requirements
- technical reasons – for example, using new processes or equipment
- organisational reasons – for example, making changes to the structure of an organistion
ETO reasons must involve a change in the workforce. This could include:
- redundancies
- a significant restructure
- a change in location of the workplace
If an employer makes an employee redundant without a valid ETO reason, it will be an automatic unfair dismissal.
In this situation, the employee could make a claim to an employment tribunal. To make a claim they must have been employed continuously by the employer for 2 years or more.
Treating employees fairly
If an employer needs to make redundancies in particular roles or teams, they must:
- treat transferred employees in the same way as employees who have worked there longer
- select employees in a fair way and not disadvantage employees who have transferred
- hold consultations with employees or their representatives about the proposed selection methods and criteria
Redundancies not related to the transfer
If the reason for redundancies is not related to the transfer, employers do not need an ETO reason involving a change in the workforce.
Find out more about managing staff redundancies
Contact the Acas helpline
If you have any questions about TUPE and redundancy, you can contact the Acas helpline.