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
  • 16 December 2025
  • Employment

Christmas Parties – Festive Fun or a New Year Hangover?

It’s Christmas party season! The office party is often a mixed blessing – an opportunity to boost morale and perhaps celebrate a successful year yet also a melting pot of workers letting their hair down, with potential for accidents, injuries, threats and claims.

art
  • 10 December 2025
  • Privacy and Data Protection

The 12 Data Protection Mistakes of Christmas

As the festive season approaches, it is not just last-minute shopping and office parties that can catch organisations off guard; data protection slip-ups are just as common.

Pub
  • 04 December 2025
  • Immigration

UK Immigration: What to expect in 2026 for employers

Join our UK immigration specialists, Ruth Karimatsenga and Monica Mastropasqua, as they explore the key updates and how they affect your business in 2026.

Pub
  • 04 December 2025
  • Corporate and M&A

Autumn Budget 2025 Breakdown: Key takeaways for business buyers and sellers

Join Stuart Mullins and Nicky Goringe Larkin as they delve into the key updates from the Chancellor’s announcement, with a focus on what matters most for businesses looking to buy and sell.

art
  • 03 December 2025
  • Corporate and M&A

Why is carrying out a legal Due Diligence investigation necessary during an proposed acquisition?

Merging with or acquiring another company is a high-stakes endeavour. The purpose, process and common areas of investigation during a M&A transaction.

art
  • 02 December 2025
  • Employment

All I Want for Christmas… Is No Tribunal Claims!

Before the festivities begin, it is worth unwrapping the key risks and understanding how employers can protect their staff, their reputation and their sanity, while still delivering a thoroughly enjoyable evening.