More company takeovers lead to increasing number of workers seeking their legal rights
3rd January 2024
Our Employment team have seen an increase in the number of UK workers seeking legal advice on their employment and redundancy rights when their employer is taken over by another business. There has been an increase in the number of enquiries from people worried about what happens to their jobs or what redundancy they may be entitled to in the event of an acquisition.
Kerry Hudson, Employment Solicitor said;
“Many clients are concerned about the changes they may face and the how their jobs or their contracts may be affected. People immediately panic when they know they’re getting a new boss. They wonder what is going to happen to them. But the first thing I always tell them is ‘your terms and conditions should not change’.
One prime concern is travel, especially, for example, among parents with children at nursery who fear they may have further to go for work. A new employer may offer travel pay and to offer the extra travel time as part of the working day, but the new conditions may still leave employees daunted. In such cases, where there is no resolution between the two parties it becomes tricky for employees to negotiate an exit. She said workers should always be mindful of asking for redundancy rather than offering their resignation. Asking a person to travel to a different location might not look like a big deal to a new employer, but to the other person it can be and they may prefer to be made redundant. But at the same time you cannot force a new employer to make you redundant.
This is where a solicitor comes in. In this instance a person should most definitely not put themselves in a position where they resign – instead they should still seek a fair redundancy. It can be tricky to negotiate when you’ve never had the experience but there is a process in which you have to explain why you can’t accept the changes, for example why you can’t travel. You will find that usually the new employer will accept your reasons. For an employee to bring a claim for constructive unfair dismissal is a lot messier for an employer than an amicable redundancy.
If there is a takeover where the company brand and operations remain the same but with new heads at the top there should be no implications on staff contracts. If a company is taken over and the face of the business changes – for example a change of brand and branches closing with staff and assets incorporated into the new brand – employment is transferred from the old employer to the new and the rights of employees come under TUPE – Transfer of Undertakings (Protection of Employment) regulations. Working terms and conditions in an employee’s contract should not change under TUPE, but if they do they should be better – for example, a better pension.
In cases where an acquisition leads to the duplication of roles across the two businesses the new owners will hold a consultation process. This can lead to employees being asked to take voluntary redundancy, take up alternative roles within the business or re-apply for their existing roles. Those that opt for voluntary redundancy should receive their notice pay as a contractual entitlement on top of any redundancy pay. Ideally those who apply for voluntary redundancy should usually also receive an enhanced ex gratia payment – an incentive for them to apply. They can even receive payment in lieu of their notice – three months’ pay without having to work, and any accrued holiday pay on top of that is always an incentive. Not only is this an incentive to the workers but also to the employers who incur far less cost.”