TivloYou've won a cleaning contract from a competitor. The client is happy. The handover date is set. Then someone mentions TUPE.
If you've been in the cleaning industry for a while, you know the word. You might not be entirely sure what it means in practice, or what you have to do, and what happens if you get it wrong.
TUPE is the Transfer of Undertakings (Protection of Employment) Regulations 2006. It applies when a business or a service is transferred from one employer to another, and its effect is straightforward: the employees who were doing that work transfer to the new employer on their existing terms and conditions. You cannot change those terms simply because you've taken over the contract.
This has real implications for cleaning businesses, both when winning contracts and when losing them.
When Does TUPE Apply?
TUPE applies in two main scenarios:
Business transfer: When an entire business or part of a business is sold or transferred to a new owner. If you acquire another cleaning company and take on their clients and staff, this is likely a business transfer.
Service provision change (SPC): This is the more common scenario in cleaning. It covers situations where a service previously carried out by one contractor is taken over by another. If you win a cleaning contract from a competitor, or if your contract is retrendered and awarded to someone else, this is almost certainly a service provision change.
For SPC to apply, the transferring activity must be organised as a service (which cleaning almost always is), the service must be provided to a client and the client must be the same before and after the change. In practice, TUPE will apply to most cleaning contract transfers.
What TUPE Means When You Win a Contract
When you take over a cleaning contract from another company, the operatives assigned to that contract become your employees on their existing terms. This means:
You inherit their employment records. Their continuity of employment carries over, which affects entitlements to statutory redundancy, notice periods and unfair dismissal claims. An operative who has worked a site for ten years has ten years' continuous employment (with you) from day one of the transfer.
You cannot change their pay or conditions simply because they transferred. If the previous contractor was paying above minimum wage, you cannot bring that rate down to match your own pay scale. You can make changes to terms later if there are genuine economic, technical or organisational reasons for doing so, but you cannot use the transfer itself as the reason.
You take on any liabilities arising from their employment. If there's an outstanding grievance, a disciplinary matter or a claim in the employment tribunal, that may transfer to you too. The outgoing contractor should disclose this information (it's a legal obligation) but always carry out due diligence before the handover date.
Practical steps before taking on a TUPE transfer:
- •Request employee liability information from the outgoing contractor at least 28 days before the transfer date (they are legally required to provide this)
- •Employee liability information must include: identity and age of transferring employees, employment particulars, disciplinary or grievance matters in the last two years, any ongoing legal actions and collective agreements
- •Meet with the transferring employees before the handover where possible: not a negotiation, but an introduction
- •Carry out your own risk assessment of the liabilities you're inheriting
What TUPE Means When You Lose a Contract
When you lose a cleaning contract to a competitor, the operatives assigned to that contract will likely transfer to the incoming contractor. Your obligations are:
Provide employee liability information to the incoming contractor. At least 28 days before the transfer date, you must give the new contractor details of all employees who will transfer. Failure to provide this information can result in a claim against you.
Inform and consult affected employees. TUPE requires you to inform employees about the transfer and consult with them (or their representatives) about any measures the incoming contractor plans to take. If you fail to inform and consult, employees can bring a claim for up to 13 weeks' pay.
Do not dismiss employees because of the transfer. If you terminate an employee's employment because the contract is transferring, that is an automatically unfair dismissal. This includes changing their terms to make them resign (constructive dismissal). If you have a genuine redundancy situation unrelated to the transfer, normal redundancy rules apply.
The Grey Area: Employees Who Work Across Multiple Sites
TUPE only transfers employees who are assigned to the organised grouping of employees that will be transferred. An operative who works two hours at the transferring site and thirty hours elsewhere is unlikely to transfer.
In cleaning businesses, where operatives often cover multiple sites, this can be genuinely unclear. There is no simple formula. Courts look at the proportion of time spent at the relevant site, whether the operative is identified by colleagues and management as part of the team for that site and whether their role is central to the service being transferred.
If you're uncertain whether a particular employee transfers, take legal advice. Getting this wrong (either transferring someone who shouldn't have moved, or retaining someone who should have transferred) creates employment liability for someone.
Common Mistakes to Avoid
Ignoring TUPE because the contract seems small. There is no minimum size threshold. Even a two-person cleaning contract can trigger TUPE.
Assuming you can change terms immediately after transfer. You cannot. Changes to pay, hours or conditions that are connected to the transfer are void. Wait until there is a genuine economic, technical, or organisational reason for the change, and take advice before making it.
Failing to meet the information and consultation obligation. This is a procedural requirement with its own penalty (up to 13 weeks' pay per affected employee). It applies even if no measures are planned.
Relying on the outgoing contractor to handle it. Both parties have obligations. Do not assume the outgoing contractor has done their part. Verify that you have received the required employee liability information and that consultation has taken place.
Getting Ahead of TUPE in Your Contracts
When you're bidding for new cleaning contracts, build a TUPE review into your process before you price. The cost of inheriting above-market pay rates, outstanding liabilities or under-performing staff can significantly affect the commercial terms of a contract.
Ask the client, at the tender stage, whether TUPE applies and to how many employees. Request the employee liability information as early as possible. Factor any inherited obligations into your pricing.
If the incoming terms make the contract unviable at your price, say so, or walk away. Winning a contract that loses money because of unforeseen TUPE liabilities is not a win.
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Note: This article provides general information about TUPE and is not legal advice. Specific situations vary and you should consult an employment solicitor or HR specialist for guidance on your circumstances.