Whether you are looking to sell or purchase a business, or restructure your operations, robust legal advice is essential.
Our Corporate and Commercial team has acted in many transactions where a business is being bought sold or restructured. Whilst the primary concern for the commercial lawyer in relation to such a transaction is the corporate aspect, the employment law issues which arise on a business transfer are equally as important. The Employment Law team here at Butcher & Barlow works in conjunction with the Corporate and Commercial team to provide advice to employers seeking to deal with transfers of staff internally.
Business transfers carried out via an asset sale are subject to the Transfer of Undertakings (Protection of Employment) Regulations 2006, also known as TUPE.
The primary purpose of TUPE is to protect employees where there is a change in the legal identity of their employer through a transfer of the whole of part of the business that employs them. It ensures that if a business is sold the employees still have a job.
The basic effect of TUPE is that employees are transferred from the previous employer to the new employer with their contract terms and all associated rights unaffected (save for specific exceptions). The transfer includes all liabilities associated with the employees. It is therefore imperative for complete and thorough due diligence to be carried out in relation to employees during a business purchase.
TUPE transfers are heavily regulated and must be carried out in strict compliance with the relevant statutory provisions. This includes the need to provide information and, in many cases to consult with employees or appropriate representatives prior to any transfer.
Dismissing someone for a reason connected with a TUPE transfer may amount to an automatically unfair dismissal, Variations to an existing contract of employment are only permitted in specific circumstances. Expert legal advice should always be sought if you are considering taking such steps as errors can be costly.
The Butcher & Barlow Employment Law team can assist in relation to the due diligence for employees prior to the transfer, along with ensuring the statutory procedure for TUPE transfers is correctly implemented to limit the liability of a business. We can also advise post-transfer in relation to any proposed variation of contracts of employment in order to seek to harmonise terms across the workforce.