Source: The Register

The Register explains how AI, automation, and cloud service models are challenging the traditional application of the UK’s Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). TUPE protects employees during outsourcing or service transfers but depends on whether the new service is “fundamentally the same” as the old.

When AI or cloud platforms replace human roles, TUPE may not apply, leaving redundancy costs to outgoing suppliers or customers. Hybrid models and phased automation complicate legal assessments. The article advises suppliers and customers to update contracts with clear clauses on redundancy costs, risk allocation, transformation timing, and exit planning. Early planning and a focus on employee impact are crucial to managing legal and operational risks in AI-driven outsourcing.