Before a TUPE transfer, the old employer may decide to make employees redundant for reasons unrelated to the transfer. In this situation, the old employer is responsible for their employees' redundancy pay.
After a TUPE transfer, if the new employer makes any employees redundant, they’ll be responsible for their redundancy pay. The new employer may have included these redundancy costs in the commercial agreement to buy the business or service.
Working out redundancy pay
In a TUPE transfer, employees who transferred to the new employer keep their original terms and conditions of employment. Their terms and conditions might include a different amount of redundancy pay to other employees.
The new employer should check employees’ employment contracts, company policies and collective agreements to see if they might need to pay them more than the legal minimum (‘statutory’) redundancy pay.
Redundancy pay will need to include employees’ carried-over:
- length of service
- contractual rights to any enhanced redundancy pay