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Help with the legal side of business transfers and outsourcing

The regulations governing business transfers and outsourcing are very complex. First4lawyers can help you cut through all the confusion.

Are you thinking of lowering costs by transferring aspects of your business to another company, or contractor? If so, you may need the advice of experts to help streamline and speed up the process.

The minefield that is consultation obligations, employment protection, liabilities and more requires a great of deal of careful planning, and potentially an experienced lawyer.

When you contact First4lawyers, we can assign specialist business solicitors to your case. They have a wealth of skill and experience in this area and will be happy to help.

What are business transfers?

Business transfers are the full or part sale of a business’s assets.

What is outsourcing?

In business, outsourcing involves the transfer of business processes to another party (contractor) but not the sale.

What are the regulations governing business transfers and outsourcing?

The Transfer of Undertakings (Protection of Employment) 2006, otherwise known as TUPE, are the main regulations governing business transfers and outsourcing. The purpose of them is to protect employees’ rights when the undertaking or business they work for changes hands from one employer to another.  

These regulations allow existing employees to choose whether they wish to move to the new employer. If so, they will do so with the same rights, pay and benefits intact.

What are my responsibilities to employees transferred into, or out of, my business?

When employees transfer to a new business in line with TUPE regulations, their new employer must take over liability/responsibility for any of the following:

  • Outstanding disciplinary action or grievances.
  • On-going industrial tribunal claims.
  • Any potential legal actions.
  • Collective agreements in force at the time of the transfer – the new employer must continue to recognise the old trade unions that transferring staff may belong to.

What are the duties of the outgoing employer?

The outgoing employer has the following obligations from a legal standpoint:

  • To inform and consult with staff.
  • To provide employee liability information to the incoming employer in writing – i.e. age, disciplinary records, employee claims.

What is the proper process for dismissal before or after a business transfer?

An employer must not dismiss any employee on the sole grounds that a business transfer or outsourcing procedure is due to – or has taken – place. In cases where a business needs to cut down its workforce to facilitate the transfer, the business must follow the appropriate procedure for redundancy.

When does TUPE not apply?

TUPE does not apply in the follow circumstances:

  • A company outsources services from a contractor on a one-off basis.
  • A transfer of share takeover occurs.
  • A business transfers assets only – e.g. if it just equipment that is sold.
  • There is a transfer of an undertaking situated outside the UK.
  • There is a change of business identity – if the work or organisational structure undergoes radical changes.

My business wants to transfer the assets and employees of an insolvent business – are we protected under TUPE?

TUPE protects incoming employers where the outgoing employer is insolvent. The liability for notice, redundancy and some other forms of compensation will not transfer to the incoming employer.

My business needs help and advice with regard to business transfers and outsourcing – what should I do?

Are you planning a business transfer or outsourcing procedure? If so, you will know that TUPE regulations are broad and complex. With this in mind, you may wish to seek help navigating this tricky legislation. 

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