Transactions and TUPE

Buying or selling a business can be a stressful experience and the last thing that you need if you are going through this process are unexpected expensive complications relating to employment or Human Resources issues which might not be within your budget. The law which deals with the way that employees are treated following the business sale is set out in the Transfer of Undertakings (Protection of Employment) Regulations, (usually referred to as “TUPE”) and usually operates to protect employees by transferring their contracts from the outgoing business to the acquiring business.

Unfortunately, much of the law (and sometimes also the practice) which has developed in respect of TUPE is highly complex. Sometimes it can be difficult to understand whether the new or acquiring business may be a different type of business to the outgoing company, in which case TUPE may not apply. Sometimes an acquiring business may wish to relocate the enterprise to a different part of the country and that can also influence the impact of the TUPE obligations. There are obligations upon both the outgoing business and the acquiring business to “inform and consult” with employees and a failure to do so can expose either business to claims on behalf of every employee of the business. This can mean that if you are buying a business you could face the cost of non-compliance by the seller. The costs which attach to the contracts of transferring employees can have a “make or break” impact on the success of the deal, therefore it is vitally important to get accurate legal advice upon the employment issues involved in your transaction at an early stage in the acquisition.

I can help to provide employment law and Human Resources advice to you and your team of advisers during the course of your project. I am highly experienced in providing this type of service and have been involved with projects such as the Asda Stores acquisition of Netto UK in 2010 which involved the TUPE transfer of 7,000 employees and the purchase of Northern Foods plc by Boparan Holdings for £342 million in 2011 which involved the TUPE transfer of 11,000 employees. Both these transactions completed with no TUPE claims against the acquiring businesses. I like to work closely with the other advisers who are part of the project team and if required, I can recommend experienced corporate and property lawyers to complete your project team for you.

If you would like to discuss the employment law issues and associated costs which are involved in your transaction, or if you have any queries about TUPE please call me on 0330 2233288 or arrange a consultation or complete my enquiry form for a free initial discussion.

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