The Transfer of Undertakings (Protection of Employment) Regulations (TUPE) and Agricultural Land
When you transfer a business (or part of it) to a new ‘undertaking’, the employees who work in that business are ‘protected’ when they transfer; the default position is that there should be no change to their T&Cs.
This might sound straightforward, but TUPE sets out important procedural steps you have to take. The issue can be relevant in the context of the sale or letting of agricultural land. Naturally, there can be lots of disputes, and if you get it wrong, you could end up paying significant compensation.
The ‘admin’ side
There are a number of administrative tasks leading up to the business transfer. You:
- may have to go through an ‘election’ process to elect staff representatives;
- must keep reps/staff informed, for example, of the likely date of transfer, the identity of their new employer, what the implications are for them more generally etc. Buyers can insist on secrecy, but under TUPE, staff must be properly consulted and informed, so careful handling is required;
- must consult with reps/staff if the new employer is considering taking ‘measures’ relating to staff, for example, redundancies, changes to employment practices, change of machinery etc.;
- must provide ‘Employer Liability Information’ (for example, T&Cs, grievances etc.) to the buyer at least 28 days before sale.
Particularly with agricultural land, the buyer may have different methods of working and may not want more employees. Buyers can insist on redundancies prior to the transfer, and that the seller takes on all legal liabilities if employees sue ‘the employer’.
‘A buyer wants to change employment T&Cs’
There must be an ‘Economic, Technical or Organisational’ (ETO) reason to do so and essentially, the buyer must be proposing redundancies along with other changes for ETO reasons.
‘Employees don’t want to transfer’
Employees are legally entitled to object to their transfer; if they do caution is needed. They should do so in writing, having first been told of the consequences, which are automatic dismissal on the date of transfer with no notice/redundancy pay.
Problems can occur where only part of a business is transferring. For example, what should happen to an agricultural farm worker who works half their time on land being transferred and half on land not transferring?
These are just some of the issues involved and it is important to get them right. If you have any questions please contact the experts in the Freeths Real Estate team.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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