When an employee resigns

Resignations connected with a business transfer


Under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), if a business - or a part of a business - is transferred to another business, in most cases the employees of the old employer will automatically transfer to the new employer on their existing terms and conditions.

However, an employee can't be transferred to a new employer against their will and may object to the transfer before it takes place.

In this case, if they refuse to have their contract transferred to the new employer, the employee is regarded as having resigned with effect from the transfer date. As a result there is generally:

  • no dismissal
  • no redundancy and therefore no right to statutory redundancy pay
  • no obligation for the new employer to take them on

However, if the transfer results in a significant and unfavourable change to an employee's working conditions - eg their new place of work is in a different more inconvenient location from their old one or there are substantial changes to their role/duties - they could resign and claim unfair constructive dismissal. However, it will ultimately be a matter for the Industrial Tribunal to determine in light of the circumstances of each case.

For more information on business transfers, see responsibilities to employees if you buy or sell a business.

  • LRA Workplace Information Service
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