Q: What are the legal considerations in buying a business and making a member of staff redundant who has been there for 14 years?
Feb 22 2010
Answered by: Peter Done Ask a question
When a business is sold and a new employer is in charge, it is likely that the transfer of an undertaking (TUPE) rules apply. This means that all of the employees of the old employer transfer to the new employer and certain protections are afforded to their employment. For example, you cannot dismiss such employees purely on the basis of the transfer.
Prior to the transfer, you should inform the employer from whom you are buying the business that you envisage that you will have to make redundancies to ensure you comply with the information and consultation provisions involved in transfers.
Transferred employees are not protected from being made redundant as long as you do not select them for redundancy just because they were transferred.
In this situation, you would need to consult with the staff working in the areas of the business that are affected to try to identify possible resolutions to the situation other than redundancy and this may well include transferred staff, and other non-transferred staff, e.g. a reduction in working hours.
The redundancy selection pool should not exclude the employee you mention just because he is a transferred employee and you should mark him against the selection criteria you have identified as relevant along with other affected staff.
If, after the marking process, this employee has been selected, then he will be made redundant. You should ensure you keep a written record of all stages of the process to show that he has been selected because of his score against relevant criteria, and not because he was transferred.
It is important to note that this employee’s redundancy pay will be based on his total length of service – that is his length of service with the old company, added to his length of service since you took over, provided there are no other circumstances that would break his service.
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