Whether TUPE applies and how it applies is a matter of law, not a matter of contract. In simple terms, neither you nor the other side chooses when TUPE applies or how it would apply – this is all determined by law. Therefore, if the elements of a TUPE situation have been satisfied, TUPE will automatically apply, whatever you have agreed between yourselves.
When it comes to service provisions, TUPE applies when a service changes providers, for example the service you had provided is taken in house by the end client or they change the service provider and get someone new to continue the provision of that service. So yes, it is entirely possible that if they terminate the service contract with you and get another company to provide the same services instead of you, those staff which were assigned to this service provision will automatically transfer to the new provider. Saying that, the affected employees have the right to opt out of a transfer so if they did not want to move to the new company they can opt out and remain working with you. This is something they have to decide for themselves though, you cannot force them.
As to the changes to the contracts, before the transfer has occurred there is no TUPE protection against changes to their terms so it is possible to have the client’s approval for any such changes. However, once the transfer occurs then the legal protection will kick in and they cannot make changes to their contracts unless allowed by law.
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