E-mail this to a friend
Print this
Hold out for what you believe your business is really worth
Financial Times
27 January 2007
Q. We are about to buy a large amount of land for project development and within the portfolio is a small retail park. I understand that there are onsite security and cleaning staff that have worked in the retail park for some time. I need to know if there will be any problems making changes to these arrangements or will I have to keep the existing staff?
Name withheld
A. Whether or not you can change the existing staff will depend upon the contractual arrangements that govern their working situation. The arrangement is likely to be either employees of the retail park, agency workers engaged by the retail park or employees of an external contractor that provides cleaning services and security services to the retail park.
Your purchase of the land is likely to be an asset purchase, which will mean that the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) are likely to apply.
That means the contracts of employment of the employees of the retail park will transfer to you from the previous employer by operation of TUPE. The employees will then have protection from dismissal as long as they have at least one year's service. A dismissal that is "connected with the transfer" will be automatically unfair unless it is for agenuine "economic, technical or organisational reason entailing changes in the workforce". Therefore, if you were to close the retail park down you could lawfully make the employees redundant, subject to following correct procedure.
If the workers are agency staff then you can, subject to the agreements in place, tell the agency that you no longer require the workers.
The staff may, however, be provided by an external contractor that provides cleaning and security services. If you want to continue the services but either change the service provider or take the services in-house then TUPE is, again, likely to apply. The effect of TUPE is, therefore, to transfer the employees of the old provider to the new provider, which may be yourselves if you brought the provision in-house, inheriting most liabilities and obligations.
If you wanted to terminate the services completely then you would need to terminate the contract with the provider on the terms of that contract.
Harriet Bowtell, a lawyer in the employment department of Russell Jones & Walker.