Round #913

We are buying the trade and assets of a competitor but not the company itself. Does TUPE apply and what employees transfer with the business?

The Transfer of Undertakings (Protection of Employment) Regulations 2006, commonly known as TUPE, apply when an employer transfers its business to another entity. However, in your case, you are buying the trade and assets of a competitor but not the company itself. This situation is often referred to as a "shell transfer" or "asset purchase." ### Key Points: 1. **TUPE Does Not Apply**: TUPE applies when there is a transfer of an undertaking (the business) from one employer to another. Since you are only purchasing the trade and assets, not the company itself, TUPE does not apply in this scenario. 2. **Employees Transfer with the Business**: In a shell transfer or asset purchase, employees typically do not transfer with the business. The employees of the original company remain employed by their existing employer unless they choose to join you as part of the new arrangement. ### What Happens: - **Existing Employees**: The current employees of the competitor will continue to work for their existing employer. - **New Arrangement**: If you want to employ some or all of these employees, you would need to enter into a separate employment contract with each employee. This is different from TUPE, which allows for a streamlined transfer process. ### Considerations: - **Employment Contracts**: You will need to negotiate individual contracts with any employees who choose to join your team. - **Compensation and Benefits**: Ensure that the terms of employment (salary, benefits, etc.) are clear and agreed upon between you and each employee. - **Confidentiality and Non-Disclosure Agreements**: Depending on the nature of the business, you may want to consider confidentiality agreements to protect sensitive information. ### Conclusion: TUPE does not apply in your situation because you are only purchasing the trade and assets, not the company itself. Employees will generally remain with their existing employer unless they choose to join you as part of a new arrangement.

Yes, TUPE applies when you buy the trade and assets of a competitor but not the company itself. Employees transferring with the business include those assigned to the transferred operations. **Explanation:** TUPE (Transfer of Undertakings (Protection of Employment)) is applicable in this scenario because it covers situations where an employer transfers its business or part of its business to another entity. The employees who are directly involved in the transferred operations, including those assigned to these operations, will transfer with the business.