Definition
Transfer of Undertakings (Protection of Employment)(TUPE)
Rules protecting staff when a service transfers between providers.
TUPE (the Transfer of Undertakings, Protection of Employment Regulations) protects employees' terms and conditions when a service contract transfers between suppliers or is brought in-house. It commonly applies when a public contract changes hands, meaning the incoming contractor may have to take on the outgoing contractor's staff on their existing terms.
Where TUPE appears in a tender
Re-procured service contracts, particularly in facilities management, catering, cleaning, transport and social care, often involve an incumbent workforce that may transfer under TUPE if the tender is won by a new supplier. Tender documents typically include a due diligence pack with anonymised staff data covering roles, pay, pensions and length of service, sometimes called an ELI (Employee Liability Information) pack.
This is a genuinely complex area of employment law where the specifics depend heavily on the facts of each transfer. Suppliers should treat TUPE as a matter requiring dedicated legal and HR advice rather than assumptions carried over from previous bids.
What the bid response needs to show
- That the pricing model has properly accounted for transferring staff costs, including pensions
- A mobilisation plan showing how transferring employees will be consulted and integrated
- Awareness of pension protection obligations that may apply alongside TUPE
- A clear point of contact for TUPE queries during the procurement, usually via the clarification process
Common pitfalls
Underpricing a bid because transferring staff costs, accrued holiday, and pension liabilities were not fully understood is one of the most common and costly mistakes in re-procured contracts. Getting early, contract-specific legal advice on the due diligence pack is standard practice among experienced bidders.
Frequently asked questions
- Does TUPE always apply when a public contract changes supplier?
- Not automatically; whether TUPE applies depends on the specific facts, including whether there is an organised grouping of employees dedicated to the contract. This is a legal question that should be assessed case by case with professional advice, not assumed either way.
- Can a supplier refuse to take on transferring staff?
- Where TUPE genuinely applies, transferring employees generally have a right to move across on their existing terms, and dismissing them because of the transfer is normally unlawful. This is a complex area with limited exceptions, so specific legal advice should always be sought before deciding on staffing approach.
- How should TUPE risk be reflected in the bid price?
- Bidders should base pricing on the due diligence information provided by the buyer, factoring in salaries, pensions, accrued entitlements and any redundancy risk, and should flag any gaps in the data through the clarification process rather than guessing.
Related terms