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
  • 13 October 2025
  • Privacy and Data Protection

AI and Data Protection: key legal developments in 2025 – 2026

The rapid integration of artificial intelligence into the workplace continues to reshape how organisations manage data, recruitment, and decision-making. Alongside this technological shift, UK and international regulators are introducing new legal frameworks designed to balance innovation with accountability.

Pub
  • 13 October 2025
  • Immigration

Spouse Visa UK Guide 2025

Our immigration solicitors have a proven track record of obtaining fiancé, spouse and unmarried partner visa for applicants wishing to come to the UK as the partner of a British/ Irish citizen or person present and settled in the UK.

Pub
  • 13 October 2025
  • Employee Ownership Trust

Get your tech business ready for market

We recommend taking the following steps to ensure your business is best placed to capitalise upon a quick and efficient sale process.

art
  • 13 October 2025
  • Corporate and M&A

Keeping It in the Family: How Family Investment Companies Work

Family Investment Companies (FICs) are becoming increasingly popular as a means of holding wealth for the benefit of different beneficiaries.

art
  • 10 October 2025
  • Employment

Prioritise mental health in the workplace – FAQs

Today is World Mental Health Day, Here are our top ten FAQ’s on reasonable adjustments for mental health at work.

Pub
  • 10 October 2025
  • Public Procurement

Public Procurement Annual Update 2025

Join Chris Tayton and Emma Butcher for the 2025 Public Procurement Annual Update webinar, covering key insights on the Procurement Act 2023, challenges under PA23, and recent case law updates on procurement awards.