What Is a TUPE Transfer?
TUPE — the Transfer of Undertakings Protection of Employment Regulations 2006 — protects workers when the business or service they work for changes hands. When a TUPE transfer takes place, you automatically transfer to the new employer on your existing terms and conditions. Your continuity of employment is preserved. Your contractual rights carry over. And crucially — dismissal connected to the transfer is automatically unfair.
This protection is powerful. But it has a significant exception — the ETO reason.
What Is an ETO Reason?
An ETO reason is an Economic, Technical or Organisational reason that entails changes in the workforce. If a new employer can establish a genuine ETO reason for dismissing a transferred employee, that dismissal may be lawful — provided a fair procedure was also followed.
The three categories break down as follows:
Economic — the business is in financial difficulty, a particular function is no longer commercially viable, or the economic circumstances of the organisation require a reduction in headcount Technical — changes in equipment, systems, or technology mean that certain roles or skill sets are no longer required in the same form Organisational — a restructuring of the business, a change in management structure, or a reorganisation of how work is carried out means that roles change or disappear The Critical Requirement — Changes in the Workforce
This is where many employers get it wrong — and where many workers have a stronger case than they realise. An ETO reason is only valid if it entails changes in the workforce. This means a change in the number of employees, or a change in the functions that employees are required to perform.
A change in pay, working hours, location, or other terms and conditions — without a corresponding change in workforce numbers or job functions — does not constitute a valid ETO reason. This was established in the landmark case of Berriman v Delabole Slate Ltd, and it remains the governing principle.
"My new employer told me my role was being restructured for economic reasons," one MyRedundancyRights reader told us. "The job title changed and my pay was cut. But I was still doing exactly the same work. They called it an ETO reason. It wasn't — it was an attempt to change my contract after the transfer and use TUPE as cover."
This misuse of ETO reasoning is more common than many workers realise — and it does not stand up to legal scrutiny.
Even With a Valid ETO Reason, the Dismissal Must Be Fair
Establishing a genuine ETO reason does not give an employer a free pass to dismiss without consequence. Even where a valid ETO reason exists, the employer must still:
Follow a fair redundancy or dismissal procedure Consult with affected employees meaningfully and in good time Consider suitable alternative employment within the organisation Apply fair and objective selection criteria Provide the correct notice and redundancy pay entitlement Failure to follow a fair procedure — even where the ETO reason itself is genuine — can result in a finding of unfair dismissal at Employment Tribunal.
Statistics That Show the Scale of the Problem
TUPE transfers affect hundreds of thousands of UK workers every year — through outsourcing, mergers, acquisitions, and service contract changes Research consistently shows that a significant proportion of workers are unaware of their TUPE rights at the point of transfer Employment Tribunal claims arising from TUPE dismissals have increased year on year, with ETO reasoning among the most commonly disputed issues Workers who successfully challenge a TUPE-related dismissal may be entitled to both unfair dismissal compensation and, where discrimination is involved, uncapped awards Practical Steps — What to Do If This Affects You
Confirm whether a TUPE transfer has taken place. Not all business changes trigger TUPE — but outsourcing, insourcing, business sales, and service provider changes often do. If in doubt, take advice. Request the reason for your dismissal in writing. Your employer must be able to identify and articulate the ETO reason clearly. Examine whether the reason genuinely entails changes in the workforce. If your role, function, and duties are essentially the same under the new employer, a claimed ETO reason may not be valid. Check whether a fair procedure was followed. Even a genuine ETO reason does not excuse a failure to consult, consider alternatives, or apply fair selection. Do not sign any settlement agreement without independent legal advice. This is a legal requirement — and your employer must contribute to the cost. Act quickly. Employment Tribunal time limits are strict — three months minus one day from the date of dismissal. Do not wait. Key Facts at a Glance
TUPE protects your employment when a business or service transfers to a new employer Dismissal connected to a TUPE transfer is automatically unfair — unless a genuine ETO reason exists An ETO reason must entail actual changes in workforce numbers or job functions — not just changes to pay or terms Even a valid ETO reason requires a fair procedure to be followed The new employer inherits all liabilities from the old employer — including any claims arising from the transfer If your terms were changed or you were dismissed after a transfer without a genuine ETO reason, you may have a strong legal claim Take Action Today
👉 Read your full TUPE and redundancy rights: https://myredundancyrights.co.uk/blog 👉 Use our free template letters to formally request the reason for your dismissal 👉 Calculate what redundancy pay you are owed: myredundancyrights.co.uk 👉 Find a specialist employment solicitor through our Partner Network 👉 Download our free Redundancy Action Plan — step by step from day one
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