Responsibilities to employees if you buy or sell a business

Transfers and employee relations

Transferring employees between businesses can affect staff morale. The result is often discontentment, not just in those transferred but also in staff left behind in the old business and existing employees in the new business.

If the process is not handled sensitively, the effects can include:

  • feelings of displacement in the employees transferred
  • anxiety among their ex-workmates who feel they might be next
  • resentment among new workmates who distrust the reason the new employees have been introduced and may resent the fact that they have different terms and conditions
  • a feeling of insecurity that may be common to all

However, if both employers know and meet their responsibilities fully and communicate openly throughout the process, then good relations can be maintained with all employees concerned.

Research shows that effective consultation can lead to better decision making and a smoother implementation of decisions and proposals, boosting productivity. This is because if employees feel they have an input into decision making, they will be more satisfied and motivated at work.

You should be especially careful to emphasise the positive benefits of the sale or purchase and try to show how the prospects for all will be improved by the changes.

See our guide on how to inform and consult your employees.

Developed with:

Department for Business, Innovation & Skills

The Department for Employment and Learning

Labour Relations Agency