Dismissed with the sale of employers business

[Falcom]

My partner has worked for 7 years in a cafe (between 3 and 5 days a week) he has no written contract etc. He was informed last year the business was for sale - two weeks ago his employer asked him what his plans for the future were when the sale was completed on 24 Feb (this was first time he had been advised of the date of the transfer of ownership). He telephoned the new owners and was advised that "she wanted a clean sweep and intended to keep on none of the present staff"). As of tomorrow he is out of work! Can you offer any advice.

 

Thanks in anticipation.

[hagenuk]

He should claim unfair dismissal without delay. This would appear to be a breach of The Transfer of Undertakings (Protection of Employment) Regulations 2006.

 

Dismissals for which the sole or principal reason is the transfer itself, or a reason connected with the transfer that is not for an economic, technical or organisational reason are regarded as automatically unfair under unfair dismissal legislation.

[Falcom]

Thanks for the quick response. I agree. I have been reading up on the web and I am sure you are correct.

 

I am however unsure what he should do next - I think he should write to the new owners seeking confirmation that they will not be continuing with his employment and asking a) for the reason why and b) if he is being made redundant - is this correct?

[Sidewinder]

Simple advice. Phone ACAS on 08457 47 47 47. As far as I am aware the new owner simply cannot do this. Providing that your partner is an 'employee' (ie has regular hours which he is expected to work and receives wageslips with tax and NI deducted, then the new owner is obliged to keep him on under exactly the same terms. The issue of a written contract is irrelevant particularly where he has been working under the same conditions for so long. TUPE regulations (Transfer of Undertakings and Protection of Employment) are absolutely clear:-

 

TUPE applies every day to an enormous number of different business transactions and it is essential that employers of all sizes understand what employment liabilities can arise. TUPE can apply (to name but a few of many examples) when employers:

• sell or buy part or all of a business as a going concern;
  
• outsource or make a "service provision change" involving either (a) an initial transfer (e.g. where services transfer from the customer to an external contractor); (b) a subsequent transfer (e.g. where services transfer from the first external contractor to a different external contractor; and © the bringing back in-house (e.g. where services transfer from an external contractor back to the customer);
  
• grant or take over a lease or licence of premises and operate the same business from those premises.

What does TUPE mean legally?

 

Employees who are employed in the undertaking which is being transferred have their employment transferred to the new employer. Employees can refuse to transfer (or "opt-out"), but depending on the circumstances of the case, they can lose valuable legal rights if they do. TUPE states that "all the transferor's rights, powers, duties and liabilities under or in connection with the transferring employees' contracts of employment are transferred to the transferee". This all-embracing concept encompasses rights under the contract of employment, statutory rights and continuity of employment and includes employees' rights to bring a claim against their employer for unfair dismissal, redundancy or discrimination, unpaid wages, bonuses or holidays and personal injury claims etc.

Employees therefore have the legal right to transfer to the new employer on their existing terms and conditions of employment and with all their existing employment rights and liabilities intact (although there are special provisions dealing with old age pensions under occupational pension schemes). Effectively, the new employer steps into the shoes of the old employer and it is as though the employee's contract of employment was always made with the new employer. For this reason it is essential that employers know all about the employees they might inherit if they are planning to take over a contract or buy a business and that they make sure that the contract protects them from any employment liabilities which arose before they became the employer. This is helped by the fact that the old employer is now required to provide to the new employer written details of all employee rights and liabilities that will transfer.

 

Any dismissals will be automatically unfair, where the sole or principal reason for the dismissal is the transfer or a reason connected to the transfer, unless it is for an economical, technical or organisational reason (an "ETO" reason) requiring a change in the workforce. This defence is narrow in scope and can be difficult to rely upon. Even if the employer can rely upon an ETO defence and the dismissal is not automatically unfair, it may still be unfair for other reasons (such as a failure to consult properly in a redundancy situation).

As the new employer is required to take on the employees on their existing terms and conditions of employment, it is prohibited from making any changes to the terms and conditions of employment of the transferred employees if the sole or principal reason for the variation is connected to the transfer (unless there is an ETO reason for the change, usually requiring a change in number of the workforce). This often makes it difficult, if not impossible, for incoming employers to harmonise terms and conditions of employment of staff after a TUPE transfer.

 

As far as I can see, your partner is being dismissed without notice, is entitled to protection under TUPE and has been excluded from consultation over his employment rights. The new owner of the business cannot simply dismiss existing staff and your partner is probably legally entitled to either remain in his job or be made redundant with the neccessary payment and notice legally due to him (around 3 months pay I calculate).

 

He must fight this and should phone ACAS for advice. In the first instance they may recommend a letter of grievance but ultimately this could go to Tribunal and somebody will have to pay out a good deal of money. I would love to see the look on either the new or old owner's faces when they realise what they have done. The old owner will either not have made as much as they thought from teh sale or the new owner will be paying more than they bargained for - tough!

 

As you may have guessed I get seriously upset when I see employees basic employment rights completely ignored by some small businesses who simply don't bother to learn their obligations to staff!

[Sidewinder]

I think he should write to the new owners seeking confirmation that they will not be continuing with his employment and asking a) for the reason why and b) if he is being made redundant - is this correct?

 

That would seem to be a reasonable approach. Write referring to his recent telephone call and express confusion at their statement that he would be losing his job. Assuming that by this they intend to make him redundant, ask when they propose to commence consultation procedures over his redundancy. That should start some alarm bells ringing.