Responsibilities to employees if you buy or sell a business

Informing and consulting employees

The old and new employers of a transferred business must inform and consult about the transfer with:

• the recognised trade union - if there is one
• employee representatives appointed by the affected employees specifically for the purpose of being informed and consulted on the transfer or who have already been appointed for a different purpose and are suitable for this purpose too

Affected employees are any employees, whether transferring or not, employed in either employer's business.

If, as the result of the transfer, the new business has more than 150 employees, they have a statutory right to be informed and consulted about substantial changes to their employment under the Information and Consultation of Employees Regulations. These regulations will apply to all business with 50 or more employees from April 2008.

What to tell representatives

The union or employee representatives must be informed of:

• the fact that the transfer will take place, when and why it will happen
• legal, economic and social implications for affected employees
• measures the transferring employer envisages taking, in relation to affecting employees, eg redundancies, relocation or changes to terms and conditions, or that no measures will be taken
• measures the new employer envisages taking in relation to employees who will transfer under the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE), or that no measures will be taken

You must consider and respond to any representations made by the employee representatives, stating your reason if you reject any of them.

When to tell representatives

Information must be provided to representatives long enough before the transfer deal is closed to give reasonable time for consultation, and the consultation must be undertaken with a view to seeking agreement.

Rights of representatives

Representatives have the right to:

• have access to the affected employees
• facilities to enable them to carry out their duties, eg a phone line or office
• time off with pay to carry out representative duties

Representatives may be eligible for reinstatement or compensation if unfairly dismissed or treated detrimentally because of their status or actions as representatives.

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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