Definition
The legal obligation on employers to inform and consult with employee representatives before a transfer of undertakings takes place, covering the timing, reasons, and implications of the transfer.
UK Context
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) require both transferor and transferee employers to inform and consult appropriate employee representatives. The 2014 amendments introduced micro-business exceptions allowing direct consultation with employees in organisations with fewer than ten staff. Compensation for failure to consult can reach 13 weeks' actual pay per affected employee, with liability potentially shared between old and new employers.
Best Practices
- Begin consultation as early as possible once a transfer is envisaged, not just when it is confirmed
- Provide written information to representatives covering all legally required matters
- Allow adequate time for representatives to consider the information and formulate responses
- Document all consultation meetings, responses, and outcomes thoroughly
- Seek legal advice early in the process, particularly where measures affecting employees are planned
Frequently Asked Questions
Who must be consulted during a TUPE transfer?
Both the transferor (old employer) and transferee (new employer) must inform and consult appropriate representatives of affected employees. These may be trade union representatives, existing elected employee representatives, or representatives elected specifically for TUPE consultation purposes.
What happens if an employer fails to consult during TUPE?
An employment tribunal can award compensation of up to 13 weeks' uncapped pay per affected employee. Liability may be shared between the old and new employer depending on which party was at fault. There is no cap on pay for this purpose, so the financial exposure can be substantial.
How long should TUPE consultation last?
There is no prescribed minimum timeframe, but consultation must begin long enough before the transfer to be meaningful. Employment tribunals assess whether employees had adequate time to understand the implications and raise concerns. Starting consultation as soon as the transfer is envisaged is best practice.