Tesco Ordered to Pay €30,000 Following TUPE Transfer: Why Maintaining Salary May Not Be Enough
When a business changes hands, an incoming employer may understandably want to integrate transferring employees into its own organisational structure.
However, the Transfer of Undertakings Regulations — commonly known as TUPE — place important restrictions on what can happen to employees' contractual rights when a business transfers to a new employer.
A recent Workplace Relations Commission decision involving Tesco Ireland provides a significant reminder that preserving an employee's salary does not necessarily mean their contractual position has been preserved.
The WRC directed Tesco to pay €30,000 in compensation to a long-serving assistant manager after finding that changes following a supermarket takeover had, in practical terms, left him demoted.
The employer lesson is important: TUPE protection can extend beyond the number appearing on an employee's payslip. Status, seniority, responsibilities and reporting structures may also matter.
What happened?
John Walsh had worked at McEvoy's SuperValu supermarket in Virginia, Co Cavan for approximately 27 years.
Although his job title was assistant manager, his role principally involved responsibility for the stockroom and deliveries.
He had control over that area and directed other staff, but did not ordinarily deal with matters such as staff rostering, disciplinary procedures, performance reviews or sales targets.
In May 2025, Tesco took over the operation of the supermarket and the employees transferred to the new operator under TUPE arrangements.
Mr Walsh expected his existing employment to transfer across. However, the difficulty was that his existing role did not have a direct equivalent within Tesco's operating structure.
The same job did not exist in the new structure
Tesco considered a line manager position to be the closest equivalent to Mr Walsh's former role.
That position would have involved responsibilities such as people management and sales targets.
Mr Walsh maintained that he repeatedly explained that he did not have the relevant experience or training for those functions.
At the same time, many of the duties he had previously performed no longer existed in the same form because Tesco used different systems and processes.
According to his evidence, approximately 90% of his eventual duties involved packing shelves.
Before the transfer
Managed the stockroom and deliveries.
Directed staff.
Had substantial control over his area.
Reported within the store's management structure.
After the transfer
Spent most of his time packing shelves.
Reported to a team leader.
Had reduced managerial status.
Additional management layers existed above him.
But his salary remained the same
Tesco argued that Mr Walsh had transferred on the same terms and conditions, including his salary.
The company also said it had conducted individual consultations with affected employees and that additional duties had not been forced upon him after he indicated that he did not wish to carry out certain functions.
That created an important legal question:
If an employee keeps the same salary and contractual benefits, can their actual job still have been changed too significantly?
In this case, the WRC concluded that it had.
What does TUPE protect?
The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 are designed to protect employees when a business, undertaking or part of a business transfers from one employer to another.
Broadly, rights and obligations arising from an employee's contract of employment transfer to the incoming employer.
The fact that ownership or operational control of the business changes does not, in itself, allow the incoming employer simply to disregard the transferring employees' contractual position.
A TUPE transfer changes the employer. It does not automatically wipe the slate clean on the employee's existing rights.
Status and seniority can matter as well as pay
This is probably the strongest employer lesson from the decision.
It can be tempting to assess TUPE compliance by checking whether an employee's salary, working hours and headline contractual benefits remain unchanged.
Those matters are obviously important, but they may not tell the complete story.
The WRC found that an important aspect of Mr Walsh's contractual position had not been maintained because additional management layers had been introduced between him and the store manager.
His substantive duties and level of authority had also changed.
Same salary does not necessarily mean same contractual position.
The WRC concluded that Mr Walsh should have been maintained in a role with similar status and seniority and that he had, in practical terms, been demoted.
A flexibility clause is not unlimited
Mr Walsh's contract contained provisions allowing his employer a degree of flexibility in relation to his work.
Flexibility clauses can be useful where an organisation needs employees to carry out reasonable variations of their normal duties.
However, they should not automatically be treated as permission to fundamentally redesign an employee's role.
In this case, the WRC considered the changes to have gone beyond the ordinary exercise of contractual flexibility.
Employers should therefore distinguish between a reasonable adjustment to duties and a change which alters the essential nature, status or seniority of the position.
What if the incoming employer operates a completely different structure?
This is where TUPE transfers can become particularly difficult in practice.
An incoming employer may have:
- Different job titles;
- Different reporting structures;
- Greater automation;
- Different management levels;
- Different ways of allocating responsibilities; and
- No direct equivalent of a transferring employee's existing role.
Commercially, the employer may want transferred staff to fit within its established model.
Legally, however, the starting point must still be the rights and obligations transferring with the employee.
“We don't have that role in our structure” does not, by itself, resolve the TUPE issue.
Consultation should focus on the substance of the proposed changes
Tesco had engaged in a consultation process before the transfer.
Consultation is an important part of managing a TUPE process, particularly where measures affecting transferring employees are envisaged.
But employers should ensure that consultation addresses what the proposed arrangements will actually mean for each employee.
Useful questions include:
- What does the employee actually do before the transfer?
- What level of authority do they currently have?
- Who do they report to?
- Do they manage or direct other staff?
- Which responsibilities will disappear after the transfer?
- What responsibilities are proposed instead?
- Will their status or seniority change?
- Does the proposed role genuinely represent an equivalent position?
- What concerns has the employee raised?
- Are alternative arrangements available?
The job title alone may not accurately capture the employee's real contractual position.
Does TUPE mean an employee is automatically entitled to redundancy?
No.
Mr Walsh argued that he should have been offered redundancy, pointing to colleagues in another section whose roles had disappeared following the takeover.
However, the WRC did not direct Tesco to make him redundant and stated that it did not have the power in these proceedings to compel the employer to provide the redundancy payment he sought.
This is an important distinction for employers.
A finding that an employee's TUPE rights have been breached does not automatically mean redundancy is the required outcome.
Questions around redundancy, organisational restructuring and potential economic, technical or organisational reasons require their own careful assessment.
The WRC considered the breach substantial
The WRC ultimately concluded that the change in Mr Walsh's employment circumstances went significantly beyond an ordinary adjustment of duties.
His salary had remained unchanged, but his working reality had not.
The decision took account of the reduction in his practical status and seniority, including the additional management layers between him and the store manager and the nature of the duties he was now performing.
The breach was considered substantial and Tesco was directed to pay €30,000 in compensation.
What should employers take from this decision?
Before restructuring the role of a transferring employee, consider:
- What are the employee's actual existing responsibilities?
- What contractual rights and obligations are transferring?
- Will the employee's pay remain the same?
- Will their status and seniority remain comparable?
- Will their reporting line materially change?
- Will they continue to exercise management responsibility?
- Are substantive duties disappearing because of automation or restructuring?
- Does a proposed flexibility clause genuinely cover the changes?
- Are any measures being properly consulted upon?
- Has the reasoning behind the proposed structure been documented?
The wider lesson for employers
TUPE does not necessarily require two businesses to operate identical organisational structures before and after a transfer.
Incoming employers may have legitimate operational reasons for organising work differently.
But employers should be careful not to assume that maintaining an employee's salary alone is sufficient.
The substance of the employee's role before and after the transfer needs to be considered.
Same pay does not necessarily mean same position.
Employers managing a TUPE transfer should assess duties, authority, reporting lines, status and seniority — not simply salary and job title — before implementing a new organisational structure.
This article is for general information purposes only and does not constitute legal advice. Specific legal advice should be obtained in relation to individual circumstances.
