Moving an Employee from an EOR to Your Own UK Ltd

• TUPE might apply, unlike in Germany. The "service provision change" rules cover activities a contractor carried out for a client being brought in-house ("insourcing"), which is what moving someone from an EOR to your own Ltd actually is.
• Whether it does apply turns on the "organised grouping" test, and the case law is genuinely split on similar facts: the Court of Appeal found a single employee working on one client's account WAS an organised grouping (Rynda), the EAT found a single employee in a similar role was NOT (Seawell). It depends on whether the employer deliberately organised that person around the client's work, not just that they happened to end up doing it.
• If TUPE applies, the employee's contract transfers automatically on its existing terms, continuity of employment is preserved, and dismissing them because of the transfer is treated as automatically unfair unless there's a genuine economic, technical or organisational reason.
• If TUPE doesn't apply, this works like the German case: the EOR employment ends and a new one starts with your Ltd, with no automatic continuity unless the new contract credits it.
• The stakes are smaller than in Germany either way, because the Employment Rights Act 2025 cuts the unfair-dismissal qualifying period from two years to six months from 1 January 2027 — so even a fresh start with the new employer reaches dismissal protection quickly.
• Get this one checked by a UK employment lawyer before you act. Treating a TUPE transfer as a fresh hire (or the reverse) when a tribunal later disagrees carries real liability, particularly around unfair dismissal and the information and consultation duties.

Germany's equivalent rule, § 613a BGB, only transfers an employee automatically when a business or part of a business changes hands as a going concern. TUPE goes further: alongside the same business-transfer rule, it has a second route, the "service provision change", that applies whenever activities move between who's carrying them out, whether that's outsourcing them, switching contractor, or bringing them back in-house. That third limb is squarely about situations like ending an EOR arrangement and employing the person directly.

That's a meaningfully bigger scope than German law. It also means the UK question isn't "did a business transfer" (clearly no, for one employee), but "was this employee organised as a dedicated grouping for this client's work", which is a different and more fact-sensitive question.

A service provision change requires an "organised grouping of employees" in Great Britain whose principal purpose is carrying out the activities for that client, and the client must intend the activities to continue after the change. A single employee can be an organised grouping, but the case law shows it isn't automatic:

• Rynda (UK) Ltd v Rhijnsburger (Court of Appeal, 2015): a single employee was the only person managing a set of properties for one client. The Court of Appeal held she was an organised grouping, because she had been deliberately assigned to that client's work, not just happened to be doing it.
• Seawell Ltd v Ceva Freight (UK) Ltd (EAT, 2011): a single employee worked entirely on one client's account, but the Employment Appeal Tribunal held he was not an organised grouping, because there was no deliberate organisation around that client specifically.
• The distinction commentators draw from these cases is whether it's "happenstance" that the person ended up doing all their work for one client, or whether the employer deliberately organised them that way. An EOR employee hired specifically to work full-time on one client's instructions, from day one, sits closer to Rynda; someone who drifted into doing mostly one client's work sits closer to Seawell. Either way, it's a judgment call on the specific facts, not a rule you can apply from a checklist.

The employee's contract transfers to your Ltd automatically, on its existing terms, as if they'd always worked for you (TUPE reg 4). Continuity of employment is preserved. A variation to the contract made because of the transfer is void unless there's a genuine economic, technical or organisational reason involving changes to the workforce, and the employee agrees. Dismissing the employee because of the transfer, without such a reason, is automatically unfair.

Both the EOR (as transferor) and your Ltd (as transferee) have duties to inform, and consult with a view to agreement, affected employees before the transfer (TUPE reg 13). For a single employee moving to a company with fewer than 50 staff, or where fewer than 10 employees are transferring, the employer can consult that employee directly rather than through elected representatives (TUPE reg 13A, in force since 1 July 2024) — which covers the typical EOR-to-Ltd case.

This works the same way as it would without any special rule: the EOR employment ends (by notice under the contract, or by agreement) and your Ltd's employment starts fresh. Continuity of service with the EOR doesn't carry over unless your Ltd's contract explicitly credits it, which affects statutory notice-period length (Employment Rights Act 1996, s. 86) and, before 1 January 2027, the two-year unfair-dismissal qualifying period. From 1 January 2027 that qualifying period falls to six months regardless, under the Employment Rights Act 2025, so a fresh start reaches dismissal protection faster than it used to.

Untaken statutory annual leave would need settling with the EOR before the move, the same practical point as in Germany, under the Working Time Regulations rather than a transferred entitlement.

• Get UK employment law advice on your specific arrangement before deciding how to treat it. Whether this particular move is a service provision change isn't something to self-assess from a general guide.
• Decide, with advice, whether to treat it as a TUPE transfer or a fresh hire, and be consistent about it in the paperwork: the EOR's termination documents, your Ltd's new contract (or lack of one, if TUPE applies and the existing contract simply continues), and payroll records should all tell the same story.
• If treating it as TUPE, carry out the information and consultation steps (reg 13/13A) before the change takes effect, even for one employee.
• If treating it as a fresh hire, decide whether to credit prior service in the new contract, as a matter of agreement rather than legal requirement.
• Either way, form the Ltd and have payroll ready before the change takes effect, so there's no gap. See UK Ltd setup costs.