When a business undergoes a transfer, whether through a sale, merger, outsourcing, or any other form of business transition, the Transfer of Undertakings (Protection of Employment) regulations, commonly known as TUPE, play a critical role in safeguarding the rights of employees. TUPE is designed to protect employees by ensuring that their employment terms remain intact when transferring to a new employer, preventing unfair changes to their terms and conditions of employment during the transition.  

For employers in Ireland, understanding TUPE is essential to ensure compliance with Irish employment law and to protect your business from potential claims and litigation. In this guide, we will explain what TUPE is, the protections it offers to employees, and the essential HR procedures that employers must follow to comply with TUPE regulations during a business transfer.  

TUPE, or Transfer of Undertakings (Protection of Employment), is a key piece of employment law designed to protect employees’ rights during business transfers. It ensures that when a business undergoes a transfer of ownership, employees retain their rights, terms, and conditions of employment under the new employer. TUPE applies to various situations, including:  

• Sale of a business or part of a business: When a business or a distinct part of a business is sold, employees assigned to that part are transferred to the new employer, ensuring continuity of employment and preservation of their existing contractual obligations.  

• Merger or acquisition: In the case of a merger, where two Companies combine, or an acquisition, where one Company buys another, the employees of the acquired business automatically transfer under TUPE, preserving their acquired rights. 

• Outsourcing or insourcing of services: If a business decides to outsource or insource services, such as cleaning, catering, or IT, the employees performing those services will transfer to the new employer, ensuring the protection of employees during such transitions.  

• Transfer of a service contract: When a business contract for services, like security, cleaning, or catering, is transferred from one contractor to another, employees working under that contract are also protected by TUPE, ensuring they maintain their employment rights and benefits.    

Under TUPE regulations, employees who are transferred from one employer to another automatically retain their existing terms and conditions of employment, including wages, holiday entitlement, pensions, and other benefits. In Ireland, TUPE is governed by EU Directive 2001/23/EC and has been implemented under the Protection of Employees (Transfer of Undertakings) Regulations, 2003.  

Key Employee Rights Under TUPE (H2) 

Employees whose employment is transferred under TUPE are entitled to several important protections, including:  

• Continued Employment: Employees’ employment is automatically transferred to the new employer, and their continuity of employment is preserved without a break in service.  

• Preserved Terms and Conditions: Employees’ existing terms and conditions of employment, such as salary, holiday entitlement, and pension rights, must be maintained after the transfer. The new employer must honour all contractual obligations outlined in the employee’s current contract.  

• Protection from Dismissal: Employees cannot be dismissed solely due to the transfer, unless there is a legitimate economic, technical, or organizational (ETO) reason that justifies the dismissal. This ensures employees’ protection from unfair dismissal during a business transfer.   

• Consultation: Both the outgoing and incoming employers have the consultation obligations to inform and consult employees about the TUPE transfer well in advance. This process allows employees to be informed about the implications of the transfer and provide input into the transition.  

Employees who are transferred under TUPE are entitled to the following protections: 

• Continued Employment: The employees’ employment is automatically transferred to the new employer without a break in continuity. 

• Preserved Terms and Conditions: The terms and conditions of the employees’ employment, including wages, holiday entitlement, and pension rights, must be maintained after the transfer. 

• Protection from Dismissal: Employees cannot be dismissed solely due to the transfer, unless there is an economic, technical, or organizational reason (ETO) justifying the dismissal. 

• Consultation: Both the outgoing and incoming employers must inform and consult employees about the transfer. This consultation process should begin well before the transfer date. 

Managing a TUPE transfer can be complex. However, by following a systematic approach, you can ensure the process goes smoothly while protecting the rights of your employees and complying with the legal framework. 

Before initiating a transfer, determine whether TUPE regulations apply. A transfer must meet the following conditions: 

• A business or part of a business is transferred. 

• There is a change in employer. 

• Employees are assigned to the business or part of the business being transferred. 

TUPE does not apply in all cases, such as where a transfer involves only the sale of assets without transferring employees, or when the change in ownership does not constitute a “transfer of undertakings.” 

Under TUPE, both the transferor (the outgoing employer) and the transferee (the new employer) are obligated to inform and consult employees or their representatives (e.g., trade unions or employee representatives) about the transfer. This process must take place well in advance of the transfer date. 

Key points of the consultation process include: 

• Timing: Consultation must take place at least 30 days before the transfer occurs. 

• Information Provided: Employers must provide information about the transfer itself, including the reasons for the transfer, the date of the transfer, the legal, economic, and social implications, and any potential impact on employees. 

• Consultation Process: Employees or their representatives must be given the opportunity to raise concerns or questions, and the employer must give consideration to these concerns. 

Once the transfer takes place, employees automatically transfer to the new employer with their existing terms and conditions intact. These include: 

• Job security: Employees’ roles are maintained under the same conditions, including salary, hours, and benefits. 

• Pension rights: Employees’ pension rights should be honoured, although in some cases, employees may need to be informed about changes to pension schemes under the new employer. 

• Holiday entitlement: The new employer must continue to honour any accrued holiday leave or entitlements the employee had with the previous employer. 

Throughout the TUPE process, employees may have concerns about the transfer, including potential changes to their work environment, duties, or terms of employment. It is important to manage these concerns by: 

• Communicating Clearly: Keep employees informed at every stage of the process, addressing any fears or uncertainties. 

• Consulting Fairly: Ensure that employee representatives or unions are fully consulted and involved in discussions about the transfer. 

• Offering Support: Employees may require support during the transition period, so it is important to offer guidance on how the transfer will affect them and any new opportunities under the new employer. 

Under TUPE, employees cannot be dismissed solely because of the transfer. Any dismissal must be for valid reasons, such as economic, technical, or organizational (ETO) changes. If a dismissal is linked to the transfer, the employee may be entitled to challenge it. 

If dismissals do occur, employers should ensure that they follow fair dismissal procedures and offer any required severance pay or redundancy benefits. 

Before completing a TUPE transfer, conduct thorough due diligence to review all employee contracts and identify any potential liabilities. This may include: 

• Reviewing contracts to ensure there are no clauses that would negatively affect employees during the transfer. 

• Assessing employee benefits, pension schemes, and other entitlements to ensure they are maintained post-transfer. 

• Identifying any risks or issues that may arise from transferring employees and addressing them proactively. 

To ensure compliance with TUPE and protect employees’ rights, implement the following HR procedures: 

1. Prepare Employees: Clearly communicate the TUPE process to employees early on. Provide them with all relevant information regarding the transfer. 
2. Consultation Process: Set up a structured consultation process with employees and their representatives well in advance of the transfer date. 
3. Documentation: Keep thorough records of all communications, consultations, and agreements made during the TUPE process. 
4. Support Employees: Offer support services, such as advice on changes to their roles, benefits, and any other concerns they may have about the transfer. 
5. Review Employment Contracts: Ensure that all employee contracts are updated to reflect any changes after the transfer and that their terms and conditions remain consistent with TUPE regulations. 

Managing a TUPE transfer in Ireland requires attention to detail and a solid understanding of employment law. If you are a business owner or HR manager facing a TUPE situation, we offer a free HR advice line for Irish employers to help guide you through the process. Whether you need clarification on employee rights, consultation procedures, or compliance, we are here to support you every step of the way. 

No, TUPE only applies to situations where there is a transfer of a business or part of a business, and employees are assigned to that business. It does not apply to the sale of assets alone or certain other types of business changes.

Under TUPE, employees’ terms and conditions should remain the same after the transfer. However, changes can occur if there are economic, technical, or organizational reasons for the changes. 

No, employees cannot be dismissed solely due to the TUPE transfer. Dismissals must be for legitimate reasons such as economic or organizational changes, and employees may be entitled to challenge such dismissals. 

Yes, both the transferor and transferee must inform and consult with employee representatives or trade unions at least 30 days before the transfer takes place.