Redundancy query

jeffscott72

Hoping someone can help.

My girlfriend has found herself in a situation where the company she works for is closing. The company is owned by two partners and both are going their separate ways and disolving the current business. One of the partners is potentially going to be hiring many of the staff for a new business, however they have now been advised that if this happens they will not be entitled to redundancy from the current job.

The logic the employer is using is that despite this being a brand new company, it is under at least some of the same management. This does not sound right to me and i was hoping someone has been through a similar experience. The new job will involve a brand new contract, and most likely involve a potentially significant pay cut so the terms of the contract will likely be quite different to her current contract.

Any advise would be much apppreciated.

blindsider

Unless her length of service etc remains (and all other Ts & Cs) then no.

TUPE regulations would apply, I don't know enough about it to comment further. (Google TUPE for further info)

Anyone know enough about TUPE to comment further?

Stheno

From Citizens Information

Rules

For a transfer of undertaking to take place:

There must be a change in the person (either an individual or a company) responsible for running the undertaking/business
The previous economic activity of the undertaking/business must be carried on by the new employer
The undertaking/business must be transferred as a "going concern".

A transfer under the Regulations does not occur in the case of a compulsory liquidation of the undertaking/business.
Contract of employment

Under the Regulations the new employer is legally obliged to take on the existing employees of the business. The terms and conditions and your employer’s obligations in your contract of employment are automatically transferred to your new employer, except for pensions – see below. If there is a collective agreement your new employer must continue to its terms and conditions until it expires or is replaced.

P45: In some circumstances employees involved in a transfer of business may be given a P45 by their old employer. They should give this to their new employer. For the purposes of redundancy legislation a transfer of business does not break the employees’ continuity of service. Instead it is transferred to their new employment.

@OP is the new company going to pick up the business of the existing company or will it operate in another area?

TUPE only applies if it is taking over the existing business.

jeffscott72

Thanks to both for your feedback thusfar.

The new business will take over part of the existing business. Essentially there are several clients managed by the current business. When the two new businesses are formed the existing clients will end up being separated between the 2 new businesses.

This probably adds to the complexity of the situation

Stheno

jeffscott72 wrote: »

Thanks to both for your feedback thusfar.

The new business will take over part of the existing business. Essentially there are several clients managed by the current business. When the two new businesses are formed the existing clients will end up being separated between the 2 new businesses.

This probably adds to the complexity of the situation

It doesn't as TUPE now applies, the company is essentially carrying on as a different entity, doing the same work etc.

Your best bet is to seek legal advice from a professional, or contact NERA

It's a slightly complex piece of workplace law and while the high level is fine on here, you'd be best seeking some professional advice from someone qualified in the area.