Responsibilities to employees if you buy or sell a business
Informing and consulting employees about business transfers
Under the Transfer of Undertakings (Protection of Employment) Regulations 2006 and the Service Provision Change (Protection of Employment) Regulations (Northern Ireland) 2006, (collectively known as TUPE), you are required to inform and consult the appropriate workplace representatives of those employees affected by the transfer.
Affected employees are not just those who are going to transfer - other employees in either business may be affected by the transfer and have a right to be informed and consulted too.
Which representatives must I inform and consult?
The appropriate representatives who you must inform and consult are either:
- Representatives of a trade union you have recognised for the purposes of collective bargaining - if there is one. See work effectively with trade unions.
- 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. For information on arranging the election of employee representatives, see employee representatives during business transfers.
If you have a pre-existing information and consultation (I&C) agreement in place, you have a duty to inform and consult employees or their representatives on - among other things - changes to the workforce. This means that you may have to inform and consult when planning to buy or sell a business.
However, you do not have to inform and consult at the same time under both TUPE and the I&C legislation - you can choose instead to 'opt out' of your I&C agreement and consult under the transfer legislation only.
What to tell TUPE representatives
The appropriate representatives must be informed of:
- the fact that the transfer is taking place, and when and why it will happen
- the legal, economic and social implications for affected employees
- any actions, steps or arrangements the employer envisages taking in relation to affected employees, eg redundancies, relocation or changes to terms and conditions, or the fact that no measures will be taken
- any actions, steps or arrangements the new employer envisages taking in relation to employees who will transfer - if the employer is the selling employer
You must consider and respond to any representations made by the appropriate representatives, stating your reasons if you reject any of them.
When to give information to TUPE representatives
You must provide information to representatives long enough before the transfer date to give reasonable time for consultation.
The consultation must be undertaken with a view to seeking their agreement.
Rights of TUPE representatives
Representatives have the right to have:
- access to the affected employees
- access to 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.