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Q: I am buying a playgroup. Am I legally required to keep on the existing staff, and if so under what conditions?

May 17 2011

Answered by: Peter Done Ask a question

The Transfer of Undertaking (Protection of Employment) Regulations 2006 provides protection for employees when the company, or the part of the company in which they work, is taken over by someone else.

The Regulations are extremely technical in nature and you should take specific legal advice on whether these Regulations apply to your specific situation. It is likely that they will, which means that the employees in the playgroup will automatically transfer into your employment. Not only will their employment transfer to you, but their terms and conditions will too; eg, level of pay, holiday entitlement etc.

You cannot simply decide you don’t want these employees to work for you because to sack them directly because of the transfer would be an automatic unfair dismissal, subject to their length of service. Similarly you cannot change their pay or any other terms and conditions. If you try to, those new terms will be void, unless the playgroup was in certain insolvency proceedings. However, it is possible to make the employees redundant if you can identify an economic, technical or organisational reason for the redundancies.

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