Buy an existing business

There are regulations that govern what happens to employees when someone new takes over a business.

These apply to all employees when a business is transferred as a going concern, meaning employees automatically start working for the new owner under the same terms and conditions. For more information, see responsibilities to employees if you buy or sell a business.

Employment tribunal awards

When you buy an existing business, you might decide you need to employ fewer staff. But be careful about making any changes, as an employee might take a case to an employment tribunal for unfair dismissal or unfair selection for redundancy. It's best to consult a solicitor before making any such changes. For more information see dismissing employees and redundancy: the options.

Inform and consult employees

If you do want to discuss reducing employee numbers or reorganising staff, it's a good idea to do this once you have completed the due diligence period, but before you take over the business. As the new employer you should inform and consult all employees - including employee representatives - who may be affected. For more information see inform and consult your employees.

Pensions

Under the Transfer of Undertakings (Protection of Employment) (TUPE) legislation, pension rights were specifically excluded, but subsequent legislation has amended this situation and includes:

• if you buy a business which runs an occupational pension scheme for employees, you have to provide those employees with access to a pension scheme that meets certain minimum conditions
• if you buy a business from a public sector body, you must offer transferred employees an occupational pension provision that is broadly comparable to that offered by the public sector body

Read more on buying or selling a business with a pension scheme.