Round #978

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?

I am not a lawyer, but I can provide a general overview based on UK employment law as of June 2024. **Does TUPE apply?** Yes, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) is likely to apply in your scenario. TUPE applies when a business or part of a business is transferred to a new employer as a going concern, even if you are only buying the trade and assets and not the company itself. This is known as a "business transfer" under TUPE. **Which employees transfer with the business?** Under TUPE, employees who are assigned to the organised grouping of resources or employees that is subject to the transfer will automatically transfer to the new employer (the buyer) on their existing terms and conditions of employment. **Key points:** - Employees assigned to the part of the business being transferred will transfer automatically. - Their continuity of employment is preserved. - All rights, powers, duties, and liabilities under or in connection with their contracts of employment transfer to the new employer. - Employees cannot be dismissed solely because of the transfer, unless there is an economic, technical, or organisational (ETO) reason entailing changes in the workforce. **Who is "assigned"?** - Typically, employees who work mainly in the part of the business being transferred. - Factors include: percentage of time spent, the terms of their contract, and how the business is organised. - Some employees may not transfer if they are not assigned to the transferring part of the business. **What should you do?** - Identify which employees are assigned to the business/assets being acquired. - Consult with the seller and seek legal advice to ensure compliance with TUPE obligations, including informing and consulting affected employees. **Summary:** TUPE is likely to apply, and employees assigned to the transferring business/assets will transfer to you automatically, with their existing terms and conditions protected. **Important:** TUPE is a complex area of law. You should seek specialist legal advice to ensure full compliance and to manage the process correctly.

Yes, TUPE (Transfer of Undertakings (Protection of Employment) Regulations) applies when you buy the trade and assets of a business as a going concern, not just the company itself. Employees assigned to the part of the business being transferred will automatically transfer to you on their existing terms and conditions, unless they object or there is a valid ETO (economic, technical, or organisational) reason for dismissal or change.