Supporting businesses in their TUPE responsibilities as they conduct company takeovers
- Taking over an existing business means that you also take on responsibility for their current employees and there are strict regulations in the UK about how this needs to be handled.
- TUPE (Transfer of Undertakings (Projection of Employment) Regulations) is the area of employment law that governs how existing employment contracts and employee rights are protected when a business changes ownership.
- A business that fails to correctly manage TUPE during a company takeover leaves themselves open to claims by employees for breaches of contract and issues such as unfair redundancies or dismissals.
When a business changes hands in the UK, TUPE regulations dictate that the existing employees must keep all of the same rights, terms, conditions and salary or rates of pay that they had under the old employer. This means that any company takeover must include effective planning for how these employees will be managed and communicated to before, during and after the takeover occurs.
Moore Barlow is experienced in helping businesses with the legal aspects of employment when planning and conducting company takeovers, helping protect businesses from the risk of future claims and maximising the chances of a smooth takeover.
What is a company takeover?
A company takeover involves the acquisition of one company by another, where the acquiring company takes control of the target company.
What are the employment law considerations with company takeovers?
With a company takeover, employee rights are protected under UK law, which means that the new business owner must adhere to their TUPE responsibilities in order to minimise the risk of future issues, such as employees making claims against them for unfair dismissals or redundancies.
A company takeover doesn’t give the new owner of the business the automatic right to change the employee’s contract, terms, working hours or salary/rates of pay. There may be some changes that can be made, with the agreement of the employee, or if the needs of the business have changed since or as a result of the takeover, but this area of law can be complex and it’s essential that proper employment law advice is taken before any company takeover new contracts or other action is discussed or proceeded with.
Company takeovers and redundancy
Company takeovers sometimes lead to the business restructuring or taking a different direction to the old company. In situations like this, redundancies are sometimes unavoidable, but there are strict regulations about how redundancies are managed in the wake of a company takeover.
It’s important that any businesses that is undergoing a takeover or has recently been taken over, takes expert legal advice about how to manage the existing employees and any potential redundancies. If the rules are not adhered to, this can mean the business leaves themselves open to claims from employees, which can have a huge negative impact financially and also on morale and business productivity.
Contact Moore Barlow
Our expert team are ideally placed to help you prepare for and implement best practice when it comes to employment law for company takeovers. We are based across our offices in Southampton, Guildford, London, Woking, Lymington and Richmond and we offer specialist essential legal assistance to clients nationwide.