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If a company is sold, do new owners have to employ the existing staff on the same terms as their original contract? 

When a company is sold, the employees of the old company are transferred to the the new company and are protected under TUPE – the Transfer of Undertakings (Protection of Employment) Regulations 2006.
 
As a result of the transfer of undertaking an employee’s terms and conditions of employment are protected, unless there is a genuine economical, technical or organisational reason that applies. An employee under TUPE will transfer to the new company on the same terms and conditions of employment eg same salary, same benefits. They will also retain their period of continuous employment, that is their start date of employment will be the date they began their original employment with the old company (unless they were also transferred to that company which means their start date would be earlier).
 
There are many technical issues surrounding TUPE and any changes being considered to terms and conditions should be discussed with professionals with knowledge on this subject.  There may be a lawful reason to vary a contract if it is an ETO, but you do not want to put yourself at risk of claims to an employment tribunal.
 

See also: Go green and stay in the black

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5 comments

Khelfaoui Hakim

My boss selling his business,do I have the right To refuse to go to the new owner,and what to do.?

Ann Southall

Im looking to buy a small transport cafe, The one im interested in is a going consern but Been neglected with little business coming in. Its in an ideal place and once the menu has been changed, buffets offered and lunches it will be a good business. This may sound silly but do i have to get solicitor involved if i decide to buy it or is it safe enough to just draw an agreement up between Us to sign?

Julie Thorpe

If the new owners do not keep the existing staff on, do they have to make them redundant?

Phyl Ee

I am buying a company and there are 2 existing staff members that I have to employ under TUPE. The one staff member is terrible at her job and has chased customers away. How can i get over this as i do not want her on my team.

Bismack Gham Lovsah

MY company is sold ,and we are still working with a new owner,but we do not kwon have agreement will be .but our new owner always talk of visa and contrat change.please,i wish to kown wheather that can be done without salary and other benefits change that is increst salary .thanks

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