Selling a business: What about your employees?
When you sell your business, as well as finalising your business affairs, you have legal responsibilities to your employees.
If you have anyone working for you, you must tell them:
- When and why you are selling the business
- About redundancy terms or relocation packages you will offer, if required.
TUPE
When a business changes owner, its employees may be protected under the Transfer of Undertakings (Protection of Employment) regulations (TUPE). The size of the business doesn’t matter but it must be in the UK.
When TUPE applies:
- the employees’ jobs usually transfer over to the new company – exceptions could be if they’re made redundant or in some cases where the business is insolvent
- their employment terms and conditions transfer
- continuity of employment is maintained
Redundancy
The new employer can’t make employees redundant just because they were transferred from another employer.
The new employer can consult about redundancies before the transfer if the old employer agrees.
If an employee is made redundant for an economic, organisational or technical reason involving changes to the workforce, they may be entitled to redundancy payment.
Employees being made redundant have certain rights, including:
- redundancy pay
- a notice period
- a consultation with the employer
- the option to move into a different job
- time off to find a new job
An accountant will work with you to ensure you are considering all aspects of selling your business.
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