Can an employee refuse to transfer under the TUPE Regulations 2006?

Yes. Employees can inform the transferor or the transferee that they object to becoming employed by the transferee, in which case the employee's contract with the transferor comes to an end and they will not transfer, but they will not generally be treated as having been dismissed.

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) allow the employee to claim that their contract has been terminated by the employer if the transfer would involve a substantial change in working conditions to their material detriment. This does not depend on the employer breaching the contract.

If there has been, or is about to be, a significant breach of contract so as to leave them with little choice but to resign, the employee may pursue a complaint of unfair constructive dismissal.