Under TUPE regulations, most of an employee’s terms and conditions of employment transfer to the incoming employer. As a consequence, all the rights, powers, duties, and liabilities that the transferor (outgoing) employer holds in connection with the employee’s contract also pass to the incoming employer.
In the case of ABC v Huntercombe (No. 12) Ltd and Others [2025] EWHC 1000 (KB), the High Court had to decide the legal position under TUPE where a third party had a negligence claim against employees working for (H), and was holding the employer (H) equally liable for their employees’ actions under the principle of vicarious liability. This principle states that where an employee's misconduct occurs in the course of their employment—i.e. linked to their work duties—the employer can be held liable for the employee's misconduct, as the employer is in a position of control over the employee’s duties and benefits from the employee's work. (A) took over the responsibilities of these employees under TUPE, and the issue was whether (A) could be responsible for the alleged negligence of these employees following the TUPE transfer.
The High Court held that any vicarious liability of (H) for the alleged acts/omissions of their employees over the treatment of (ABC) did not transfer to (A) under TUPE. For any liability to transfer under TUPE, there would need to be a direct connection between the liability and the transferred employment contract—i.e. the connection must not be too remote. TUPE legislation’s primary purpose is to safeguard the rights of employees after their employment transfers, and it is not specifically concerned with preserving the rights of third parties.
However, an incoming employer could still inherit discrimination matters where an employee being TUPED over alleges unresolved discrimination issues that were ongoing with the outgoing employer, as such liabilities are connected to the contract of employment and are not too remote.
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