Acquiring any business requires both the Oldco and Newco to go through a TUPE - Transfer of Undertakings (Protection of Employment), unless the Oldco went into administration or liquidation prior to being acquired and then the requirement is only for the Newco to consult

TUPE is renowned for being a minefield of unclear and poorly written legislation, especially prior to the introduction of the TUPE Regulations 2006. Even after the 2006 update of the legislation there are still substantial grey areas which remain and the only way to find solutions to some situations is to be aware of previous tribunal cases and their outcomes.

HR Business Dynamics can assist you through this process and advise you on the legislation surrounding the TUPE process, as well as consult with employees relating to their terms and conditions. TUPE requires the protection of employee’s terms and employment except where a change is for Economic, Technical or Organisational reasons (ETO).

We can assist you in reviewing the Oldco terms and conditions and work with you to construct the new terms and conditions, employee handbook etc. The starting point for this process is to look at all the employee’s contracts and files, normally starting with the Directors and most senior employees to ascertain what liabilities there may be. These could be excessively high salaries, Bonuses, lengthy notice periods and personal injuries etc. It would be hoped that some form of due diligence would have been done prior to acquiring the business.

Once you have an overview of the current staff, their terms, remuneration and benefits we can begin to construct, through consultations, the terms and conditions of their new employment. A large number of their existing terms may be protected under TUPE, however there are still a large number of issues which aren’t – for instance the Oldco may have had a Long service bonus scheme, something like this wouldn’t be protected by TUPE and could be removed. Similarly the employee’s contracts may be outdated; you have every right to tighten their contracts with Confidentiality and Intellectual Property clauses to protect your business.

It’s well worth remembering that although TUPE provides employees with certain levels of protection, they can still agree through negotiations to amend certain of their terms. There is no problem in changing employee’s terms, provided they consent to them.