Taking over a going concern business - TUPE

Taking over a going concern business - TUPE

Author
Discussion

jezzaaa

Original Poster:

1,867 posts

258 months

Wednesday 2nd September 2015
quotequote all
Hi all,

Hope you're all well smile

Got a question re TUPE. I'm considering taking over another going concern, mainly because we want the premises for another business activity, not related to the existing one.

There are a number of staff working there, and unfortunately none are suitable to be employed as part of the new business due to the specific skills and experience required. None of the existing staff are skilled, and I suspect that their employment contracts will not have any complex redundancy arrangements etc. The current owner has said he'll only sell as a going concern and he doesn't want to deal with the staff issues.

So the rather insensitive question is...can we give them all notice on the completion date and just pay them for that month? Or will there be statutory redundancy payments etc?

Thanks,
J.

Cyberprog

2,186 posts

182 months

Wednesday 2nd September 2015
quotequote all
Rather than TUPE them into your existing company, why not buy out the other company and keep it separate, then wind it up.

anonymous-user

53 months

Wednesday 2nd September 2015
quotequote all
It's a redundancy situation.

So they will have to be paid at least the statutory minimums.

jezzaaa

Original Poster:

1,867 posts

258 months

Wednesday 2nd September 2015
quotequote all
Cyberprog said:
Rather than TUPE them into your existing company, why not buy out the other company and keep it separate, then wind it up.
Sounds interesting...but I would like to be fair to the current employees. After all, it's hardly their fault and will have huge implications for them.

jezzaaa

Original Poster:

1,867 posts

258 months

Wednesday 2nd September 2015
quotequote all
desolate said:
It's a redundancy situation.

So they will have to be paid at least the statutory minimums.
Hmmm I thought as much...time to google that then!

jezzaaa

Original Poster:

1,867 posts

258 months

Wednesday 2nd September 2015
quotequote all
Sounds like the key questions are how many full time and part time employees are there, how long they've worked there, how old they are and what their weekly pay is.

So our costs per person will be a month's pay plus the redundancy. according to gov.uk...if they're on minimum wage, they're 30 years old and have worked there for 5 years, the payment is about 1400 quid per worker.

mfmman

2,362 posts

182 months

Wednesday 2nd September 2015
quotequote all
The notice period may not be a month, it will be the statutory period or more depending on their contracts of employment.

You will need to undertake a consultation period as well but this might run concurrently with the notice period

mfmman

2,362 posts

182 months

Wednesday 2nd September 2015
quotequote all
jezzaaa said:
Cyberprog said:
Rather than TUPE them into your existing company, why not buy out the other company and keep it separate, then wind it up.
Sounds interesting...but I would like to be fair to the current employees. After all, it's hardly their fault and will have huge implications for them.
I don't think you would need to TUPE them, there is no Transfer of Undertaking if the roles they do will no longer exist

fat80b

2,242 posts

220 months

Wednesday 2nd September 2015
quotequote all
jezzaaa said:
Sounds interesting...but I would like to be fair to the current employees. After all, it's hardly their fault and will have huge implications for them.
If the business is a going concern and you are just going to wind it up anyway, is there not a way you can not offer the employees the business (albeit not in the premises), they could take the business on and relocate to somewhere else perhaps?

Bob

jezzaaa

Original Poster:

1,867 posts

258 months

Wednesday 2nd September 2015
quotequote all
fat80b said:
If the business is a going concern and you are just going to wind it up anyway, is there not a way you can not offer the employees the business (albeit not in the premises), they could take the business on and relocate to somewhere else perhaps?

Bob
Hi Bob - it's a good thought, but unfortunately the old business has to have the premises to work. It's currently a pub!!

sm1tty

31 posts

131 months

Wednesday 2nd September 2015
quotequote all
jezzaaa said:
Sounds interesting...but I would like to be fair to the current employees. After all, it's hardly their fault and will have huge implications for them.
Agree it's good to do the decent thing if you can, but don't forget that having the assets acquired still in an existing or new ringfenced legal entity gives you options to choose what is fair... E.g. It limits the risk of a protracted unfair dismissal claim from a disgruntled employee, while you still can choose to fund the statutory redundancy in a winding up.

anonymous-user

53 months

Wednesday 2nd September 2015
quotequote all
mfmman said:
jezzaaa said:
Cyberprog said:
Rather than TUPE them into your existing company, why not buy out the other company and keep it separate, then wind it up.
Sounds interesting...but I would like to be fair to the current employees. After all, it's hardly their fault and will have huge implications for them.
I don't think you would need to TUPE them, there is no Transfer of Undertaking if the roles they do will no longer exist
A good example of internet rubbish!

OP, there is NO SUBSTITUTE for taking insured professional advice about this. TUPE is complex. Get it wrong and you may face a big bill. Saying "some blokes on a car forum said it would be OK" won't help.

edc

9,230 posts

250 months

Thursday 3rd September 2015
quotequote all
Based on your initial sentence TUPE may not need to be an issue. However, the devil is in the detail. If you are looking for a simple asset purchase then you may avoid be able to TUPE. In any case, why would you want to buy a business, with other unnecessary assets as well as liabilities when you have identified the one thing you want?

jezzaaa

Original Poster:

1,867 posts

258 months

Thursday 3rd September 2015
quotequote all
Breadvan72 said:
A good example of internet rubbish!

OP, there is NO SUBSTITUTE for taking insured professional advice about this. TUPE is complex. Get it wrong and you may face a big bill. Saying "some blokes on a car forum said it would be OK" won't help.
Hi BV .. thanks! I agree...I will be taking professional advice...but I like to be a little bit prepared so I can open up with good questions rather than going in cold. And I find PH a fantastically useful mine of information...you can always count on someone here being knowledgeable, even about the most arcane/obscure subjects! smile

jezzaaa

Original Poster:

1,867 posts

258 months

Thursday 3rd September 2015
quotequote all
edc said:
Based on your initial sentence TUPE may not need to be an issue. However, the devil is in the detail. If you are looking for a simple asset purchase then you may avoid be able to TUPE. In any case, why would you want to buy a business, with other unnecessary assets as well as liabilities when you have identified the one thing you want?
I'd rather just buy the asset...but the current owner isn't willing to do it. He'll only sell it as a going concern.

mfmman

2,362 posts

182 months

Thursday 3rd September 2015
quotequote all
Breadvan72 said:
mfmman said:
jezzaaa said:
Cyberprog said:
Rather than TUPE them into your existing company, why not buy out the other company and keep it separate, then wind it up.
Sounds interesting...but I would like to be fair to the current employees. After all, it's hardly their fault and will have huge implications for them.
I don't think you would need to TUPE them, there is no Transfer of Undertaking if the roles they do will no longer exist
A good example of internet rubbish!

OP, there is NO SUBSTITUTE for taking insured professional advice about this. TUPE is complex. Get it wrong and you may face a big bill. Saying "some blokes on a car forum said it would be OK" won't help.
Breadvan, no need to be quite so aggressive. If I were constantly posting things as 'fact' (not an opinion as my post clearly was by the use of 'I think') or constantly disagreeing with your professional opinion then you might be justified!

So educate us (or even just me), the OP is buying a pub, he wants the premises only and will not be running a pub or anything similar to a pub and the roles undertaken by the staff will not relate to the business he will run from the premises, why might TUPE apply? Why wouldn't he simply follow the correct redundancy process as a part of winding up the pub activity?

Just be be clear to avoid a repeat, no questioning your expertise, I'd like to learn


Edited by mfmman on Thursday 3rd September 19:19

Innowaybored

896 posts

106 months

Friday 4th September 2015
quotequote all
jezzaaa said:
Hi all,

Hope you're all well smile

Got a question re TUPE. I'm considering taking over another going concern, mainly because we want the premises for another business activity, not related to the existing one.

There are a number of staff working there, and unfortunately none are suitable to be employed as part of the new business due to the specific skills and experience required. None of the existing staff are skilled, and I suspect that their employment contracts will not have any complex redundancy arrangements etc. The current owner has said he'll only sell as a going concern and he doesn't want to deal with the staff issues.

So the rather insensitive question is...can we give them all notice on the completion date and just pay them for that month? Or will there be statutory redundancy payments etc?

Thanks,
J.
As someone who has been through this my advice would be to get decent HR advice (colaw is my go to). If the job roles available are significantly different then TUPE won't apply and you will be able to make them redundant.

In your favour as well is the current government clamping down on the ability for an employee to raise a claim cheaply. However what I did was shift responsibility to the HR consultancy. It was cheap (in comparison to potential claim costs) and everything went smoothly.

All the best