What is TUPE?
This stands for the Transfer of Undertakings (Protection of Employment) Regulations. Where an undertaking is transferred from one business to another all Employees formally employed by the first company are automatically transferred to the other. The "new" Employer takes on the Employees on their existing terms and conditions.
The Regulations impose obligations on information and consultation. Failure to comply could result in affected Employees receiving up to 13 weeks salary.
In the due diligence process care must be exercise in identifying Employees likely to be affected by business transfer, and statutory obligations then observed.
More detailed guidance on TUPE can be found on the Department for Business Innovation and Skills website: http://www.bis.gov.uk/tupe