Responsibilities to employees if you buy or sell a business

Introduction

Employee rights are protected when all or part of a business is bought or sold.

Employee rights are also protected when a contract to provide goods or services is transferred, but only where the circumstances of the contract transfer are equivalent to the transfer of a business or undertaking to a new employer.

Under the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE), employees usually transfer to the new employer on the same terms and conditions.

This guide explains which transfers are covered by TUPE and which are not, the responsibilities of the old and new employers, the rights of employees, and the requirements to inform and consult employees affected by the transfer.

New regulations covering information and consultation of employees came into force in April 2005. Under the regulations, employees have a statutory right to information about and consultation on employment developments and substantial changes to the organisation of their work, such as a transfer of ownership.

Subjects covered in this guide

• Introduction
• What is meant by a transfer and who is affected
• Selling your business - your responsibilities to employees
• Buying a business - your responsibilities to employees
• Buying a business - dismissals and privatised business
• Informing and consulting employees
• Transfers and employee relations

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