Search

How can we help?

Icon

The importance of understanding the economic entity in a TUPE situation

For there to be a business transfer under TUPE there must be an ‘economic entity’ that retains its identity post-transfer.

To assess what amounts to an economic entity, the nature of the business activities needs to be understood.  In a labour-intensive business, such as cleaning, the transfer of the employees will be vital for TUPE to apply, however, for a business more heavily reliant on other assets such as land or equipment, the transfer of these will be the important factors.  This is always a question of fact for the Tribunal.

This point arose in the ECJ case of Securitas v ICTS Portugal.  In this case, Securitas took over security services from ICTS.  ICTS engaged security guards who were responsible for monitoring the entry and exit of persons and goods, by means of video surveillance devices. ICTS also provided them with uniforms and radio equipment.  Securitas took on the equipment involved in the work but refused to take on the employees and the question arose as to whether this prevented TUPE from applying.

In a labour-intensive business, such as cleaning, the transfer of the employees will be vital for TUPE to apply, however, for a business more heavily reliant on other assets such as land or equipment, the transfer of these will be the important factors.

The ECJ, deciding the point under Portugal’s Labour Code, reiterated the above principles and returned the case to the court to determine the matter on the facts.  It is worth noting, that one of the key questions for the ECJ in this case was whether the transfer of a service such as this could amount to a transfer of an undertaking, a point not in contention under English law by virtue of service provision changes being expressly covered under the Transfer of Undertakings (Protection of Employment) Regulations 2006.

Disclaimer
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

Author profile

About this article

Read, listen and watch our latest insights

art
  • 25 September 2026
  • Employment

Consultation response on duty to inform workers of right to join a union

From 30 October 2026, the Employment Rights Act 2025, makes it a requirement for employers to inform workers of their right to join a trade union at the same time as the Section 1 particulars are issued to them and at subsequent times. The details of this new duty are to be provided in regulations.

art
  • 24 September 2026
  • Public Procurement

Procurement challenges: What documents and information are bidders entitled to?

A tricky feature of public procurement challenges for unsuccessful bidders is that contracting authorities usually hold all the cards. When the outcome of a tender conducted under the Procurement Act 2023 has been decided, authorities must provide bidders with an Assessment Summary containing their scores for each of the award criteria and those of the successful bidder and an explanation for those scores.

art
  • 23 September 2026
  • Corporate and M&A

GDPR Privacy Policies: Key requirements for organisations

When an organisation is creating a website or app to reach users or potential customers drafting a Privacy Policy may be an afterthought. However, failure to write a Privacy Policy, which complies with the relevant legislation, can have serious consequences.

Pub
  • 17 September 2026
  • Employment

Employment law changes in 2026: What you need to know

Stay ahead of the latest UK employment law changes. Watch our on demand webinar with Monica Atwal and Harry Berryman covering key HR developments and employment law updates for 2026.

art
  • 16 September 2026
  • Employment

Received an Employment Tribunal Claim? 6 Things Employers Should NOT Do

We are well and truly underway with implementation of the Employment Rights Act 2025 (“ERA 2025”) and October brings the next tranche of changes that employers will need to be ready for.

art
  • 14 September 2026
  • Corporate and M&A

Key provisions found in a Shareholders’ Agreement – SHA Series Part 2 of 5

Discover the key provisions in a shareholders’ agreement, including ownership, decision-making, share transfers, exits and leaver clauses.