The other day I was talking to a business purchaser who told me he was just about to draft his Heads of Agreement for a purchase of a non-core business division, when his partner, who was having a chat to one of the target's employees, unearthed a very nasty employment dispute between the owner and one of his sales managers.
At first they weren't too concerned, after all the business was changing hands - it wasn't their problem.
Fortunately, the buyers ran it past their lawyer, who in no uncertain terms told them that it sure was going to be their problem, and that the owner should have disclosed the details on the dispute. The potential downside wasn't going to be too severe, in the low five figures, if the employee won in arbitration. However the fact that the vendor owner held this back put the buyers right off, not unsurprisingly concerned there may be other skeletons in the closet.
The legal side of this is all laid out in no uncertain terms under the Transfer of Undertakings (Protection of Employment) Regulations 2006, commonly referred to as TUPE.
Anyone buying a business needs to understand that they are not only inheriting employees, but also responsibility to honour all existing employment contracts and conditions of employment. This extends to disputes, tribunal claims and collective employment agreements.
The TUPE regulations apply whenever there is deemed to be a 'relevant transfer' of an undertaking and applies to mergers, sale of a business by way of assets sale, going concern, or a change in franchisee among others. It does not apply to business transfers by way of share take-over.
For a more in-depth look, please read our full article on TUPE Regulations, published in the March 2008 issue of the Business Sale Report.
This premium interiors company offers an attractive opportunity with its fully managed, high-end service encompassing design, manufacturing, and installation, all performed in-house to maintain superior quality. Serving a prestigious client base in a...
This is an opportunity to acquire a high performing business operating in the electronics sector. Expressions of interest with offers should be sent by close of business, 11 July 2025, with a target date for completion of 18 July 2025.
This innovative digital health and integrated care technology provider offers a unique suite of products designed to support the independent living of older people, using advanced IoT sensors and machine learning for effective falls detection and pre...
Business Sale Report is your complete solution to finding great acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.