A guide, not advice. This explains how things generally work. A licensed insolvency practitioner will tell you what applies to your company or to you.
TUPE and insolvency - what employers need to know
TUPE - the regulations that transfer employees with a business - meets insolvency in ways that decide who inherits the workforce and its liabilities, and the answer differs sharply by procedure.
The core distinction
In rescue procedures - administration, including pre-pack sales - TUPE applies: employees assigned to the business transfer to the buyer with continuity and terms broadly intact, though insolvency-specific flexibilities apply (certain arrears stay with the government scheme, and permitted variations are wider).
In terminal proceedings - a liquidation opened to realise assets - TUPE's automatic transfer rules are disapplied: employees are dismissed and claim through the Redundancy Payments Service, and a purchaser of assets from the liquidator generally doesn't inherit the workforce.
What that means in practice
For buyers: the procedure shapes the deal - buy from an administrator and price in the workforce; buy assets from a liquidator and hire afresh, taking advice where the line blurs.
For directors selling via pre-pack: the workforce transfers to the new company, terms and all - part of the price of continuity, and part of why pre-pack pricing is independently scrutinised.
For employees: transfer protects jobs; liquidation triggers prompt state-backed claims - different protections, not no protection.
Boundary cases are genuinely technical - take specific advice before relying on either side of the line.
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This page is intended for general information purposes only and does not constitute financial, legal, or professional advice. Always take advice from a licensed insolvency practitioner about your specific position.