Harper James is a UK full-service commercial law firm advising ambitious businesses on the laws of England and Wales. Redundancy and TUPE are separate issues, but they often arise together during a sale, outsourcing arrangement, merger or business closure. TUPE generally protects employees when a business or service transfers to a new employer. It does not prevent genuine redundancies, but dismissing employees because of the transfer is generally automatically unfair unless there is an economic, technical or organisational reason involving changes in the workforce.
The current TUPE framework permits direct consultation with affected employees where the employer has fewer than 50 employees, or where fewer than 10 employees are transferring. Larger transfers and organisations must follow the representative consultation rules, including electing or consulting appropriate employee representatives where required. The outgoing and incoming employer should identify affected employees, share the prescribed information, review employment liabilities and agree responsibility for consultation, redundancy costs and claims. Further guidance on the interaction between transfer planning and workforce changes is available in this practical employment resource.
Collective redundancy consultation is a separate obligation. It applies where an employer proposes at least 20 redundancies at one establishment within a 90-day period. The minimum consultation period is 30 days for 20 to 99 proposed redundancies and 45 days for 100 or more. The employer must also submit the required HR1 notification to the Secretary of State within the statutory timescale. These duties apply alongside, rather than instead of, TUPE consultation.
A business should document the commercial reason for the restructure, the roles at risk, the proposed selection pool and the alternatives considered. Selection criteria should be objective, applied consistently and checked for discriminatory impact. Consultation should cover the proposal, scoring, suitable alternative work, notice, redundancy pay and any proposed settlement agreement. A transferee should also check whether the proposed changes amount to a substantial change in working conditions, since TUPE may provide additional protection.
The practical sequence is to establish whether TUPE applies, obtain accurate employee liability information, map the proposed organisation, identify any collective consultation threshold, consult the correct representatives, and record decisions carefully. Transaction documents should allocate employment liabilities through warranties, indemnities and completion arrangements. Early coordination between HR, finance and legal advisers reduces the risk of inconsistent messages, defective consultation and unexpected post-transfer claims.