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Selling Or Buying A Business |
Whether you're buying or selling a business it is one of the most important financial decisions you'll ever make. A business sale or purchase can be a complex and time-consuming process with inherent risks, therefore getting expert legal and business advice is critical.
Selling
I am selling my business. What will happen to my employees?
There are legal responsibilities to staff under the Transfer of Undertakings (Protection of Employment) Regulations, (TUPE). In essence the new owner will take over all rights and obligations including contractual terms of the employees already in the business.
Am I expected to communicate the planned sale to staff, and how much information should I be giving them?
Under TUPE you are expected to consult with staff. If you have staff representatives in place already, or there is a recognised union, you must involve them. If not, you should organise an election of staff representatives specifically for this purpose and communicate through them, the fact that the transfer will occur, proposed date of transfer, reason for transfer, and any measures that you, the employer, intend to make.
Buying
Can I change the contracts of my new staff on purchasing the business?
In short no! The rights and obligations under each employee's contract of employment transfer with the sale of the business, including bonus, commission plans and benefits with the exception of pensions. Employees may claim constructive dismissal if their terms are breached.
I am thinking of merging my business with another. What are the legal obligations in circumstances where I have too many staff and not enough jobs?
One of the reasons for merging is to enhance the efficiency of the business and this sometimes means that staff cuts may be necessary. In such circumstances redundancies can be justified under the TUPE regulations for economic, technical or organisational reasons. Normal redundancy consultation procedures would then need to be followed to ensure these are considered fair.
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