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After a TUPE transfer, employers can agree with employees to change an employment contract following the usual process. But there are other things to consider if the main reason for changing the contract is the transfer.

If the main reason for a contract change is the transfer

Your new employer can only make changes because of the transfer if either:

they improve your terms and conditions, for example your employer increases your holiday entitlement (annual leave)
there is an 'economic, technical or organisational' (ETO) reason involving a change in the workforce, for example your organisation needs restructuring

TUPE regulations give some protection to your terms and conditions for an indefinite period. For example, if your new employer wants to change your terms and conditions 10 years later, they’d still need a valid reason for the change that is unrelated to the transfer.

ETO reasons for contract changes

Your employer might want to change your employment contract because of an 'economic, technical or organisational' (ETO) reason. By law, they can agree this with you if there is also a change in the workforce, for example a restructure or redundancies.

ETO reasons include:

essential cost-saving requirements (economic reasons)
using new processes or equipment (technical reasons)
making changes to the structure of an organisation (organisational reasons)

Example – a valid ETO reason for a contract change

PrintsCo is a large printing organisation in Luton. It recently bought a smaller organisation called Medias Creative in Dunstable. All 27 employees at Medias Creative transferred to PrintsCo. Most of the technology at PrintsCo is more advanced, apart from some specialist equipment still used at Medias Creative. This means the work can now be done by fewer employees. PrintsCo decides to restructure its organisation and makes 5 employees redundant. After consulting with all affected staff, PrintsCo agrees with affected staff to change their contracts so they can now work from either the Dunstable or Luton locations. This is likely to be a valid ETO reason because there’s a technical reason (new equipment) that involves a change in the number of the workforce (redundancies).

Example – an invalid ETO reason for a contract change

A college had staff working to 6 different sets of terms and conditions resulting from TUPE transfers so it wanted to put everyone on the same terms for ease of administration and to cut costs. They dismissed and rehired an employee with a pay cut which they refused to accept. This was found to be automatically unfair at an employment tribunal. The reason for the dismissal was the transfer. It’s not a valid ETO reason because the main reason for the dismissal was the transfer and the proposed changes do not involve a change in the workforce.

Improving terms and conditions to match those of existing staff

After a TUPE transfer, it’s likely that you’ll have different terms and conditions to the employees who already work for the new employer.

You do not have an automatic right to the same terms and conditions as them.

However, your new employer may choose to 'harmonise' your terms and conditions (change them so you have the same as other employees). They can only do this if it improves your terms and conditions. They may choose to keep your terms and conditions the same as before.

Your terms and conditions cannot be changed to something worse than before, unless your new employer has a valid ETO reason.

Your new employer should make sure any differences in terms do not treat particular groups of employees unfairly. Find out more about discrimination and the law.

If the main reason for a contract change is not the transfer

If a contract change is unrelated to the transfer, TUPE regulations do not prevent you and your employer from making changes to your terms and conditions.

Your new employer may have valid reasons for agreeing contract changes with you. For example, if business needs have changed for reasons that do not relate to the transfer.

You and your employer must agree to any changes and follow the usual process for changing an employment contract.