Buying a Business and TUPE

TSE Solutions Employment Law Case Study – I am buying a business; do I have to take on the staff as well?

Employer: I own a dental practice and am in the process of buying another practice to expand. Do I have to “take on” the practice’s existing staff?

The short answer to this question is likely to be yes. The TUPE Regulations are designed to protect the employees of a business which is being purchased by a third party. In this case, the staff of the practice the client is buying will most likely be transferred over.

Employers in such a situation often wish to change the terms and conditions of the transferring employees so that they are the same as their existing employees’ terms. Also, employers sometimes wish dismiss members of staff and some staff often feel disgruntled because they are not told about the transaction until it has happened.

Employers need to be aware that changing employees’ terms and conditions, whether the change is positive or not, may be illegal, and unless certain conditions are satisfied, any dismissals associated with the transaction, are likely to be unfair and could result in compensation being paid to the departing employees. Also, employers are required to inform, and depending on the circumstances, consult with the affected employees about the transaction and a failure to do so could result in employees being awarded up to 13 weeks pay as compensation.

It is therefore crucial to take good advice on the implications of the TUPE Regulations, and to take that advice early on, as the potential compensation payable to employees if an employer gets it wrong, is significant.