Buying a business – employees possess the right to object to their transfer under TUPE

The seller’s employees who are either under a contract of service or carrying out an apprenticeship, can successfully oppose getting transferred to the buyer. One’s objection in this regard, must simply be communicated to either the transferor i.e. the seller or the transferee i.e. the buyer. Should such an event materialise, the employees’ contracts of employment and the pertinent rights, liabilities, powers and duties will not be passed on to the new employer. The employment contracts will be terminated when the business has changed hands, but the workers will not be construed as being dismissed. Furthermore, the employees will only be entitled to statutory or contractual compensation if the transferor commits a repudiatory breach or they suffer a material detriment due to a substantial change in their working conditions.

It is imperative that the employees voice their objection before the date of the transfer. According to the Employment Appeal Tribunal (EAT), a worker has not exercised their right to object if they have not clearly withheld their consent to getting transferred. Nevertheless, objections that are made after the date of the transfer can be deemed valid in exceptional circumstances the High Court has held that there are certain exceptions to the norm. For instance, where the date of the transfer and/or the identity of the transferee has not been disclosed, an employee’s objection, even if it transpires after the transfer date, would still be accepted by the judiciary of England and Wales. This is primarily because the European Court of Justice (ECJ) has elucidated that an employee’s right to choose their employer is a fundamental right and should consequently not be undermined.

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