Springhouse Solicitors

Buying or selling a business – Don’t forget consultation

Employers hate the detailed information and consultation requirements which need to be followed when a business sale or purchase involves staff transferring under TUPE. This is usually because of the unsettling effect it can have on staff, particularly when the deal is unsigned, or the purchaser needs to make changes to the way they work.

Employers fail to get the information and consultation process right at their peril, however. It can be costly. Penalties are punitive up to 13 weeks pay per employee. And these are extremely easy claims for employees to bring.

Broadly, to avoid the penalties, representatives need to be elected, formally given certain information, and actively consulted over any measures which are envisaged.

Whether there are going to be measures which require consultation is a moot point, and a recent case means that employers should err on the side of caution. In this case, mere changes in the dates employees were paid in the days leading up to the transfer were held to be measures requiring consultation. Because there was none, they were each awarded 7 weeks pay!

The case does suggest that “administrative changes that are the inevitable consequence of a transfer” do not need to be consulted over, but most employers will not want to take the risk.