Q: I am buying a business, which has five members of staff. I want to run it as a family business, so won’t need all of the present workers. Can I dismiss them or reduce their hours without any legal issues?
Dec 08 2009
Answered by: Peter Done Ask a question
The simple answer to your question is no, you can’t do either of those things without any legal issues.
When a company is taken over (subject to particular details) the employees involved are given specific protection by legislation called the Transfer of Undertaking (Protection of Employment) Regulations.
These regulations were introduced to, upon a transfer from old employer to new one, protect the rights of employees, maintain continuity of employment, and enable them to enjoy the same terms and condition under the new employer as under the old one.
Generally, a change to an employee’s contract (e.g. a reduction in hours) will be void if the sole reason for the change is the transfer itself, or where the reason for the change is connected with the transfer. You would therefore not be able to enforce the change to the contract.
Similarly, it is generally unlawful to dismiss an employee, who has 12 months service or more, where the sole reason for the dismissal is the transfer itself, or for a reason connected with the transfer.
However, the regulations do say that a dismissal or a change to the contract in the circumstances of a transfer is permitted where there is an economic, technical or organisational reason for your actions.
The legal issues surrounding transfers, and particularly economic, technical or organisational reasons, are extremely detailed and professional advice is always recommended when dealing with transferred employees.
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