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Insolvency, Employment Protection and Corporate Restructuring: The effects of TUPE


  • J.Armour
  • S.Deakin


The statutory protection currently provided by UK law to employees during transfers of undertakings and other restructurings has been criticised on the grounds that it undermines insolvency procedures and interferes with the 'rescue' process. We present an analysis which suggests that granting employees contingent control rights may be an efficient means of recognising their firm-specific human capital. Case-study evidence shows that while in some situations employment interests to be factored into the bargaining process so as to enhance the survival chances of enterprises undergoing restructing. the law functions best when effective mechanisms of employee representation are in place and when the conditions under which employees' acquired rights can be waived in the interests of preserving employment are clearly specified. When these institutional conditions are met, employment law performs an economically-valuable role in expressing the interests of employee-stakeholders in the firm.

Suggested Citation

  • J.Armour & S.Deakin, 2001. "Insolvency, Employment Protection and Corporate Restructuring: The effects of TUPE," Working Papers wp204, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp204
    Note: PRO-2

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    Cited by:

    1. John Armour & Michael J Whincop, 2005. "The Proprietary Foundations of Corporate Law," Working Papers wp299, Centre for Business Research, University of Cambridge.

    More about this item


    corporate governance; stakeholding; employment protection; corporate restructuring; transfers of undertaking; insolvency;

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law


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