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Whenever a business is bought, the parties must comply with the Transfer of Undertakings (Protection of Employment) Regulations 2006, known as TUPE Regulations. These Regulations are intended to protect employees. They apply to an employer whether they have hundreds of employees or just a few. They apply equally to public or private sector businesses.

Here are some of the major points if you are an employer buying a business.
 
  1. The new employer steps into the shoes of the previous employer. This means the new employer must take on the existing employees on their existing contracts of employment, as if their contracts of employment had originally been made with the new employer. Therefore, the employees' terms and conditions remain the same.
  2. The new employer cannot ask the previous employer to dismiss any employee before buying. Any employee dismissed (even by redundancy) because of the transfer of business may be automatically deemed to be unfairly dismissed. As you have purchased this business you have also potentially purchased the liability of these employees and you can, therefore, be deemed to be responsible for any compensation due to the affected employees.
  3. The new employer cannot change or dismiss an employee because of the transfer, even after you have bought the business, unless there is an economic, technical or organisational reason under the TUPE Regulations.
  4. The new employer may after the transfer need to consider harmonisation of contracts of employment. This is a complex area and we would strongly recommend that you take specialist legal advice when considering this action.  

Lawson-West act for many people buying businesses and Lawson-West work closely with clients to ensure that the business transaction takes place smoothly with minimum disruption and maximum protection.

Due to the complex nature of TUPE we strongly advise that you seek specialist advice as soon as possible. 

For more details or a copy of the TUPE Regulations, contact Ashley Hunt, Vaishali Thakerar or Carrie-Ann Randall on 0116 212 1000 or complete the form on the right. Lawson-West also offer advice on TUPE Regulations for Selling a Business.