If you are thinking of acquiring the whole – or part of another business – or if you are the target of a takeover or merger – you must take into account the provision of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘TUPE Regs’).
A transfer for the purposes of the TUPE Regs generally fall into 2 categories:
This is where a business or part of a business moves to a new owner or merges with another business to make a brand new employer. Where a business transfer takes place the key question is whether there is a transfer of a ‘stable economic entity’ that will retain its economic entity after the transfer.
A Service Provision Change
This is where a contractor takes over activities from a client (outsourcing), a new contractor takes over activities from another contractor (re-tendering), or where a client takes over activities from a contractor (in-sourcing).
The TUPE Regs are extremely complex and it is important that you take expert legal advice before you embark upon any type of transfer.