Does Tupe apply when a company becomes insolvent?

What happens to the employees of an insolvent business when it is sold? Do they transfer to the new owner and are they covered by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (Tupe)? As the recession deepens and the number of insolvencies increases, these questions are becoming highly topical.

In Oakland v Wellswood (Yorkshire) Limited (UKEAT/0395/08), the Employment Appeal Tribunal delivered the controversial decision that employees did not transfer to the purchaser of a business in administration.