New company owners

[MrBaker]

Hi all,

Just a quick one,

If a business is sold, (in this case a back street car garage), does the new owner have to keep the employees on or can they just get rid?

Thanks

[Eric Mc]

Depends on the nature of the disposal of the old business and the type of agreement between the buyer and seller.

What is the buyer actually buying?

[MrBaker]

Im not sure, my friend is a mechanic there and has been told(by the selling employer) they cant get rid of them without the verbal, written warning process etc.

[Eric Mc]

Why does he want to get rid of them?

Is the business ceasing i.e. are they being made redundant?

Or

Is he just fed up with his employees and wants to get rid of them because he doesn't like them any more?

[MrBaker]

I don't think they are getting rid, I think that was just my mates concern....that they could if they wanted to.

[Eric Mc]

MrBaker said:

I don't think they are getting rid, I think that was just my mates concern....that they could if they wanted to.

If they are "taking over" the existing business lock, stock and barrel, then yes, they will have to retain the existing workforce under the existing terms and conditions of their current employment contracts.

They may not want to "buy" the business on those terms so may engineer a different sort of purchase where they just buy "parts" of the business - such as the business premises and business plant and machinery - and then start a brand new business with their own staff.

[MrBaker]

makes sense,

Thank you for your help

Andy

[trickywoo]

Eric Mc said:

If they are "taking over" the existing business lock, stock and barrel, then yes, they will have to retain the existing workforce under the existing terms and conditions of their current employment contracts.

They may not want to "buy" the business on those terms so may engineer a different sort of purchase where they just buy "parts" of the business - such as the business premises and business plant and machinery - and then start a brand new business with their own staff.

This link provides more details https://www.gov.uk/government/uploads/system/uploa...

Bottom of page 5 is pretty useful.

If the 'new' owner takes legal advise I'm pretty sure the gist would be that to avoid issue they would need to TUPE the old employees and then carry out a formal redundancy process or reach an agreement with the employees to leave voluntarily (with a sweetener).

If the new owner doesn't want to keep your mate on your mate my get the best financial result by doing a deal to leave.

Carrying out TUPE and then a redundancy process to the letter of the law can be daunting and expensive (if legal advise is taken) for a small employer and they may favour a payout style deal.

Either way they can't just drop your mate and he may be advised to politely / subtly let the new owner know that he knows.

Depending on the experience of the new owner they may not even be aware of any issues.