When you sell a dental practice, you are not just transferring a building, equipment, and goodwill. You are transferring a workforce — or part of one. How that workforce is treated during the sale is governed, in most cases, by the Transfer of Undertakings (Protection of Employment) Regulations 2006, known as TUPE.
TUPE exists to protect employees when a business changes hands. It can impose significant obligations on you as a seller and create real liability if the process is not handled correctly. But dental practice sales have a specific complexity that makes TUPE more nuanced than in most other business types: the workforce is typically split between employed staff and self-employed associates — and TUPE treats these two groups very differently.
This guide explains when TUPE applies to a dental practice sale, what it means for your employed staff and your associates, how the structure of your deal affects your obligations, and what due diligence you need to complete before you go to market.
What TUPE Does
TUPE protects employees when a business or undertaking is transferred from one employer to another. When TUPE applies:
- All qualifying employees transfer automatically to the buyer on their existing terms and conditions
- Their continuity of employment is preserved — years of service carry over as if there had been no change of employer
- The buyer inherits all existing employment liabilities, including any historical claims or disputes
- Employees cannot be dismissed because of the transfer — doing so is automatically unfair dismissal
- Terms and conditions cannot be changed solely because of the transfer
Critically, TUPE cannot be contracted out of. Both seller and buyer have legal obligations that apply regardless of what the sale agreement says. Attempting to avoid TUPE through clever drafting will not work — and attempting to dismiss staff in connection with the transfer creates significant legal exposure for both parties.
The Key Distinction in Dental Practices: Employees vs Self-Employed Associates
Most dental practices operate with two distinct groups of clinical staff: employed staff (including any salaried dentists, dental nurses, therapists, hygienists, and reception/admin staff engaged under a contract of employment) and associates (dentists who work under an associate agreement, typically on a self-employed basis).
TUPE applies to employees. It does not automatically apply to genuinely self-employed individuals.
Employed Staff
Any member of your team who works under a contract of employment — whether full-time, part-time, or on a zero-hours basis — is covered by TUPE on an asset sale. This typically includes:
- Salaried dentists
- Dental nurses
- Dental hygienists and therapists employed directly
- Reception and administration staff
- Practice managers
- Decontamination technicians
All of these individuals will transfer to the buyer automatically on completion of an asset sale, on their existing terms. The buyer must honour their contracts, their holiday entitlements, their notice periods, and any other contractual benefits.
Self-Employed Associates
Associates who are genuinely self-employed — meaning they work under an associate agreement rather than a contract of employment, they bear their own tax risk, and they have the substance of self-employment in practice as well as on paper — are not caught by TUPE. They do not transfer automatically to the buyer. They must decide independently whether to continue working at the practice under the new ownership, and if so, on what terms.
This is a significant difference from the employed staff position, and it has important practical implications for both seller and buyer. If the practice’s NHS Units of Dental Activity (UDA) are delivered primarily by associates, the buyer has no guarantee of retaining those associates after completion. A practice that looks highly productive on paper can become far less valuable if key associates choose not to continue.
For this reason, buyers — particularly corporate buyers — will commonly make the retention of key associates a condition of the transaction, or will insist on speaking directly with key associates during the due diligence process.
The Worker Classification Risk
Employment law does not always reflect how a working relationship is described on paper. Courts and employment tribunals can look beyond the label of “self-employed associate” and ask whether the reality of the working relationship is that of an employee or a worker with employment rights.
The Supreme Court decisions in Autoclenz v Belcher and subsequent case law have established that courts will examine the true substance of the relationship — not just the written agreement. A dentist whose work is controlled by the practice, who is required to work specific hours, who has no real ability to substitute someone else, and who bears none of the genuine commercial risk of self-employment may be found to be an employee or a worker in law, even if their associate agreement says otherwise.
If an associate is in practice a worker or employee, TUPE may apply to them on a sale — and both you as the seller and the buyer could face employment tribunal claims if they are treated as outside its scope.
Before going to market, you should review your associate agreements and ensure they accurately reflect the actual working relationship. Poorly drafted agreements or agreements that do not match reality are a material due diligence risk.
Share Sale vs Asset Sale: How the Deal Structure Affects TUPE
Whether TUPE applies at all depends on how the sale is structured. The two main routes are an asset sale and a share sale, and they have fundamentally different TUPE implications.
Asset Sale
In an asset sale, the buyer purchases the practice as a going concern — the goodwill, the equipment, the patient list, the NHS contract (subject to NHS approval), and the business as an operating entity. The seller retains the legal entity (the company or sole tradership) but strips out the business.
TUPE applies to asset sales. All qualifying employees transfer automatically to the buyer. The buyer inherits their employment contracts, their continuity of service, and all historical employment liabilities that attach to those individuals.
This is the most common structure for dental practice sales in the UK, particularly where the practice is owned by an individual dentist or a partnership. Asset sales are frequently preferred by buyers because they allow a clean break from the corporate history of the selling entity.
Share Sale
In a share sale, the buyer purchases the shares of the company that owns and operates the dental practice. The company itself — and therefore its employees — remains unchanged. There is no change of employer: the company was the employer before the sale and remains the employer after it.
Because there is no change of employer, TUPE does not apply to a straightforward share sale. The buyer simply inherits all of the company’s existing employment relationships, contracts, and liabilities as part of acquiring the company itself.
This does not mean employment issues are irrelevant in a share sale — quite the contrary. A buyer in a share sale acquires all historical employment liabilities of the company, including any potential claims by current or former employees. Thorough employment due diligence is essential in a share sale precisely because the buyer cannot cherry-pick which obligations to take on.
In practice, the choice between asset sale and share sale in dental practice transactions is driven by a combination of tax considerations, NHS contract transferability, and buyer preference rather than TUPE considerations alone.
NHS Associate Continuity: A Dental-Specific Consideration
Associates who hold NHS performer numbers and deliver NHS UDAs under the practice’s NHS contract create a specific challenge in dental practice sales that does not arise in other business types. The NHS contract is between the NHS Integrated Care Board (or NHS England) and the practice entity — not the individual associates. But if key associates leave after completion, the practice may not be able to deliver its NHS commitment, which can trigger contract clawback, performance sanctions, or ultimately contract termination.
This creates a tension between the TUPE framework (which protects employees but does not require self-employed associates to continue) and the practical requirement for associate continuity to maintain the value of the NHS contract.
What Buyers Will Require
A sophisticated buyer acquiring a dental practice with a significant NHS contract will typically require one or more of the following:
- Associate retention agreements — commitments from key associates to remain at the practice for a defined period post-completion, often 6 to 24 months
- Direct negotiation with key associates — the buyer may insist on speaking with associates directly before exchange of contracts to assess retention risk
- Warranties and indemnities — the seller warrants that no key associates have given notice or indicated an intention to leave
- Earn-out or deferred consideration — part of the purchase price is deferred and made conditional on UDA delivery or associate retention post-completion
As a seller, you should be proactive about associate continuity well before you go to market. Associates who are unhappy with current arrangements, who have not been engaged on updated terms, or who have signalled a wish to exit create a material valuation risk. Addressing these issues before sale — not during due diligence — protects both your sale price and your timeline.
Associate Agreements and Goodwill
Well-drafted associate agreements will include provisions confirming that the goodwill of the practice belongs to the principal rather than the associate. This is important in a sale because it prevents an associate from claiming a share of the practice goodwill or from asserting that their patient relationships entitle them to a proportion of the sale proceeds.
Restrictive covenants in associate agreements — preventing an associate from setting up in competition or approaching patients within a defined radius and period after leaving — are also valuable to a buyer assessing the security of the patient base. Buyers will review whether these covenants are enforceable: overly broad restrictions are liable to be struck down by courts and offer no real protection.
TUPE Obligations: What Sellers Must Do
Regardless of whether the sale is structured as an asset sale or a share sale, sellers have specific TUPE obligations that must be complied with. Failure creates personal liability and can disrupt or delay completion.
Employee Liability Information
Before completion of an asset sale, the seller must provide the buyer with employee liability information (ELI) for all transferring employees. This information must be provided at least 28 days before completion (or sooner if agreed). ELI includes:
- The identity and age of each transferring employee
- Their terms and conditions of employment, including salary, hours, and benefits
- Details of any disciplinary action taken in the past two years
- Details of any grievances raised in the past two years
- Details of any legal actions brought by employees in the past two years, or any legal actions that the seller reasonably believes may be brought
- Details of any collective agreements that will transfer to the buyer
Failing to provide ELI — or providing it late — entitles the buyer to claim compensation from an employment tribunal. In practice, ELI disclosure is managed through the legal due diligence process, but it is the seller’s responsibility to ensure the information is complete and accurate.
Informing and Consulting Employees
TUPE requires that affected employees — including those who transfer and those who remain with the seller — are informed and consulted about the transfer. Where there are employee representatives or a recognised trade union, information and consultation must be conducted through those channels. In small dental practices without recognised representatives, employees must be given the opportunity to elect representatives, or the information must be provided directly to each employee if no election is requested.
The minimum information that must be provided includes:
- The fact that the transfer is occurring and the proposed date
- The reasons for the transfer
- The legal, economic, and social implications of the transfer for the affected employees
- Any measures the seller envisages taking in relation to the transferring employees
- Any measures the buyer envisages taking in relation to the transferring employees (the seller must ask the buyer for this information, and the buyer is legally required to provide it)
Consultation must be meaningful — employees must be given a genuine opportunity to raise questions and receive responses. Failure to inform and consult is a joint liability between seller and buyer, with compensation of up to 13 weeks’ pay per affected employee.
TUPE Due Diligence Checklist for Dental Practice Sellers
Preparing your practice for sale requires you to get your employment house in order before a buyer’s solicitors begin asking questions. The following checklist covers the key areas a buyer will investigate.
Employment Contracts
- Do all employed staff have written employment contracts?
- Are the contracts up to date and consistent with current statute (including the Employment Rights Act 1996 as amended)?
- Are hours, pay, holiday entitlements, and notice periods clearly specified?
- Are restrictive covenants in place for senior staff who have access to patient data or business relationships?
Associate Agreements
- Do all associates have written associate agreements?
- Do the agreements reflect the actual working relationship (not just a template that contradicts practice reality)?
- Do the agreements confirm that practice goodwill belongs to the principal?
- Are restrictive covenants in place, and are they reasonable in scope?
- Are the agreements reviewed periodically and updated to reflect any changes in working arrangements?
Workforce Composition
- Can you clearly identify who is employed and who is self-employed?
- Are there any individuals whose employment status is uncertain or disputed?
- Are any staff on maternity, paternity, or long-term sick leave?
- Are there any outstanding disciplinary or grievance matters?
- Have any employment tribunal claims been brought in the last two years?
NHS Performer Numbers and UDA Delivery
- Which associates hold NHS performer numbers?
- What proportion of the practice’s NHS UDA delivery depends on each associate?
- Are any key associates close to retirement or considering leaving the practice?
- Have any associates given any indication — formally or informally — that they would not wish to continue under new ownership?
Collective Arrangements
- Are there any recognised trade unions at the practice?
- Are there any collective agreements in place?
- Are there any employee representatives?
Benefits and Pension
- Are all eligible employees auto-enrolled in a workplace pension?
- Are there any enhanced pension contributions or benefits beyond statutory minimum?
- Are there any private healthcare, income protection, or life assurance benefits in place for employed staff?
The Buyer’s TUPE Perspective
Understanding what a buyer needs from you on TUPE helps you prepare more effectively. Buyers — particularly corporate acquirers and dental service organisations (DSOs) — will conduct thorough employment due diligence before committing to a price. Their concerns typically focus on three areas.
First, inherited liabilities. The buyer inherits all employment liabilities that attach to transferring employees. Any undisclosed claims, unfair dismissal disputes, or historical issues with employee management become the buyer’s problem after completion. Full and early disclosure protects both parties — if a liability is disclosed, it can be priced or indemnified; if it emerges post-completion without disclosure, it becomes a warranty claim.
Second, associate retention risk. As noted above, the buyer of an NHS dental practice is particularly exposed to the risk of key associates declining to continue. A buyer who pays a premium for a busy NHS practice and then loses the associate delivering 70% of the UDAs faces a serious business problem. Buyers will price this risk into their offer, or seek structural protections through retention agreements or deferred consideration.
Third, workforce stability. The buyer wants the practice to run smoothly after completion. Disruptive TUPE processes — or the failure to conduct proper information and consultation — can damage morale among the transferred workforce and create legal liability. A seller who has handled TUPE properly reassures the buyer that the transition will be smooth.
Getting Specialist Advice
TUPE in dental practice sales is not an area to navigate without specialist employment law advice. The combination of employed staff, self-employed associates, NHS contract considerations, and the specific due diligence requirements of corporate buyers means that a generic employment law approach will not be sufficient.
Engage a solicitor with experience in dental practice sales — not just business sales generally — at the outset. They will help you identify any employment issues that need to be resolved before going to market, ensure your associate agreements are fit for purpose, manage the information and consultation process correctly, and draft the employment warranties and indemnities in the sale agreement.
For further reading on how TUPE applies in a different sector, see our guide on TUPE when selling an estate agency. The principles overlap, but the workforce composition and NHS-specific considerations make dental practice TUPE distinctly different.
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Frequently Asked Questions
Does TUPE apply when selling a dental practice?
TUPE applies to employed staff when a dental practice is sold as a going concern in an asset sale. It does not apply to genuinely self-employed associates, who are not automatically transferred and who decide independently whether to continue working at the practice under new ownership. In a share sale, TUPE does not apply because there is no change of employer — the company remains the same, only its ownership changes.
Do dental associates transfer with the practice under TUPE?
Genuinely self-employed associates do not transfer under TUPE. They are not employees and are therefore outside the scope of the regulations. However, if an associate’s working arrangements are such that they could legally be classified as a worker or employee — despite being labelled as self-employed — they may have TUPE protections. This is why associate agreement review before sale is essential. Associates who are in practice employees but classified as self-employed represent a significant undisclosed liability.
What is the difference between a share sale and an asset sale for TUPE purposes?
In an asset sale, TUPE applies and all qualifying employees automatically transfer to the buyer on their existing terms. In a share sale, the company itself transfers — so there is no change of employer and TUPE does not apply. However, a buyer in a share sale inherits all the company’s existing employment liabilities as part of the acquisition. Both structures require thorough employment due diligence; the nature of the risk differs rather than the existence of it.
What happens to NHS associates when a dental practice is sold?
NHS associates who are self-employed are not automatically transferred on a sale. They can choose whether to continue working at the practice under the new owner. Buyers of NHS practices are acutely aware of the risk that key associates may not remain — since the practice’s ability to deliver its NHS UDA commitment depends on those associates continuing. Buyers typically seek associate retention agreements, conduct direct engagement with key associates during due diligence, and may structure part of the consideration as deferred payments conditional on UDA delivery.
What information must a seller provide to the buyer about employees?
On an asset sale, the seller must provide employee liability information (ELI) to the buyer at least 28 days before completion. ELI includes the identity, age, and terms and conditions of each transferring employee, plus details of any disciplinary action, grievances, or employment tribunal claims in the past two years. Failure to provide complete and timely ELI entitles the buyer to claim compensation from a tribunal. ELI is typically managed through the legal due diligence process.
Can you dismiss staff before selling a dental practice?
Dismissing employees because of or in connection with a planned TUPE transfer is automatically unfair dismissal. This applies both before and after the transfer — regardless of whether the seller or the buyer carries out the dismissal. Dismissals that are genuinely for reasons unconnected with the transfer — such as genuine redundancy for an economic reason that existed before the sale — may be lawful, but the connection with the transfer is always scrutinised closely. Take specialist employment law advice before taking any action that could be characterised as transfer-related.