Whenever a business is bought or sold issues relating to employment are bound to arise. It could be a case of the workforce needing to be reorganised ahead of such a change or problems could arise relating to the Transfer of Undertakings Protection of Employment regulations of 2006 (TUPE).
Ahead of selling a business, there is a good chance that employers will have to make redundancies and dismiss certain members of staff. Taking such measures may be necessary to attract potential buyers, balance the books ahead of a sale or make the make the business more profitable. However, when letting staff go employers must respect various rules and regulations. An employer should always approach redundancies sensitively given the effect that they have upon people but in order to avoid legal sanction employers should ensure their compliance with employment laws.
It may be case that as well as, or instead, of staff redundancies, employers will make alterations to employment contracts in order to free up cash. In some situations, changes to pension schemes can be made without first gaining the permission of the staff but when it comes to altering the terms of staff contracts employers must consult employees first. Therefore, before taking such measures, employers should seek advice from a specialist employment solicitor.
Whether changing staff contracts or making redundancies, employers must respect TUPE rules which are in place to safeguard the interest of the workforce when a business changes hands. The law dictates that the same workforce should transfer automatically to the new business under the same contracts that they previously held. Should employees find that their initial employer has not complied with TUPE regulations they could make sizeable compensation claims.