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Wednesday, 3 October 2012

Business transfers and takeovers: right to consultation

If the company you work for is going through a business transfer or takeover, both the transferring employer and new employer have a responsibility to inform and consult with employees who may be affected by the transfer.

Information and consultation

Any employee who will be affected by a business transfer or takeover has a right to be informed and consulted by their employer. This might include employees who:

  • will be transferred
  • will not be transferred but whose jobs might be affected
  • work for the employer taking on the transferring employees, and might be affected by the transfer

Your employer should inform you:

  • that the transfer is going to take place, approximately when, and why
  • the legal, economic and social implications of the transfer for the affected employees
  • whether any measures like reorganisation will be taken, and how they will affect you

If you are transferring to a new employer, your current employer should also consult with you about any action your new employer thinks they will be undertaking that will affect you. The consultation must be carried out with the aim of coming to an agreement.

If your current or future employer thinks they could be taking action that will affect you, they must consult with your employee representatives to try and get your agreement to the action. They must give you the information in good time.

If any reorganisation is planned, your representative can put forward your views. Your employer must reply to these. If they reject the views then they must say why.

Informing and consulting with representatives

The information and consultation with employees normally happens through nominated employee representatives.

Trade union representatives

If you have an independent trade union recognised for collective bargaining purposes in your workplace, your employer must inform and consult an authorised official of that union. This may be a shop steward or a district union official or, if appropriate, a national or regional official. The employer is not required to inform and consult any other employee representatives, but can decide to if the trade union is recognised for one group of employees but not for another.

Employee representatives

If you are not represented by a trade union, your employer must inform and consult other appropriate employee representatives. These may either be existing representatives or new ones specially elected.

Your employer is responsible for making sure the consultation is offered to appropriate representatives.

For example, your employer should not inform and consult a committee specially established to consider the operation of a staff canteen about a transfer affecting sales staff. However, it might be appropriate for your employer to inform and consult a fairly elected or appointed committee of employees, such as a works council, that is regularly informed or consulted more generally about the business's financial position and personnel matters.

What to do if you have problems

Acas (the Advisory, Conciliation and Arbitration Service) offers confidential help and advice on employment rights. Alternatively, you could contact your local Citizens Advice Bureau for help.

If you cannot resolve the problem with the employer informally, you may be able to make a complaint to an Employment Tribunal if you are an:

  • employee representative and you feel the employer failed to inform and consult
  • employee with 12 months' continuous service and you feel the employer has not followed the information or consultation requirements

You can decide to make a claim against your transferring employer, your new employer or both. If you bring a complaint against only one employer, the employer could decide to join the other employer in the case.

Where both employers are joined in the complaint they will split the payment of any compensation. It is up to the Employment Tribunal to decide what proportion each one pays.

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