Q&A - Can company that is taking over make us redundant?

24/09/2012

Q:  The company I work for is about to be taken over by a bigger company that is planning to move part of its operation onto our site. If they bring their own workers with them there will be too many people for the jobs and my colleagues and I are concerned that we will be the ones to be made redundant. We don't belong to a Union. What should we do?

A:  The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) offers employees protection against redundancy which comes about as a direct result of business transfer. In other words, the new company cannot make you redundant just because it takes over the firm you work for and decides to bring its own staff with it. Also, if an employee is asked to sign a new contract it must offer the same benefits as the old one. If it doesn't, they should not sign it.

TUPE is however a technical minefield and it is not unknown for new management to try and sidestep the legislation. They might for example offer a cash sum as a ‘consideration' in exchange for accepting new contractual terms. Or they might offer alternative employment at another site, knowing it is not feasible for the employee to take it.

There are also exceptions which override TUPE protection, for example where there is an economic, technical or organisational reason for dismissal or redundancy. This could relate to the profitability or market performance of the purchasing company's business, or to the nature of equipment or production processes they operate, or to the management or organisational structure of their business.

Due to the complexities of TUPE regulations you should seek legal advice about your position as soon as possible.

Robert Williams

Robert Williams

Partner

Partner and Head of the Civil Litigation, Personal Injury and Dispute Resolution team in Wrexham