Business Sales and Employees

If you are in the position as a business owner that you are either selling your business or acquiring a new one, you must, if the target business has employees, consider the impact of Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”). 

The most important things to consider about TUPE are the following:

  1. Employees should not be dismissed before or after the transfer of the business unless this can be justified by way of an economic, technical or organisational reason (ETO);
  2. The terms of conditions of an employee cannot become less favourable as a result of the transfer unless again justified by an ETO reason;
  3. All affected employees, both existing in the current business and those incoming as a result of the transfer must be kept informed and consulted about the impact that the transfer may have on them and their employment.

TUPE also applies to outsourcing and insourcing exercises where the identity of a contractor or subcontractor changes as a result of a tender. 

The application of TUPE can be complicated and we advise anybody who believes that TUPE may apply to their commercial transaction to get comprehensive legal guidance.  We can advise how best to protect your business from any potential claims against you by either incoming or outgoing employees.