I’m buying a new business — how do I take on employees in a transfer of undertakings?
AM taking over a new business and I will also be taking on the staff there. As part of the transfer of undertakings process I want to ensure this process is done smoothly. Please advise. employer immediately prior to the transfer. The new employer takes on all liability for all employees and so it is of utmost importance that a transfer of undertakings is carefully considered.
In the event of a transfer, all obligations, including continuity of service, arising out of the employment relationship are automatically moved to the new employer.
The legislation provides that all employees must be informed of the timing and reasons for the transfer, through their representative.
It is also required that these representatives are consulted on the transfer, with a view to reaching agreement, within 30 days or in good time. There is no requirement that an agreement is actually reached. This should cover: the reasons for the transfer; the legal, social and economic implications for the employees; the scale of the transfer. An employee representative can mean a trade union, staff association or other body the employer has conducted collective bargaining with in the past. It can also be a person chosen by fellow employees to represent them. If an employee representative’s term of office expires as a result of the transfer, she/he will continue to enjoy the express protection provided by the Unfair Dismissals Acts 1977-2001 for such representatives.
The range of key HR issues that need to be examined if the chances of success are to be optimised include:
ensuring that due diligence provides comprehensive data on all aspects of employee reward, terms and conditions and pending/potential employment liabilities as all of these will be acquired in the transfer by the new employer; identifying harmonisation issues post-transfer; estimating both the time frame and the potential cost of any redundancies;
ensuring that cultural due diligence is carried out prior to a transfer, so that integration programmes can be implemented immediately post-transfer;
communicating with affected staff and giving the necessary time, resources and processes to manage the transfer (pre and post transfer);
moving quickly in the appointment of new management personnel as appropriate.
To ensure the smooth transfer of any business, the following points should be carefully considered: EMPLOYEE LISTS AND TERMS AND CONDITIONS OF EMPLOYMENT A list of all active employees should be provided. This should include details of employee’s contract type, eg full-time. Personnel files should also be examined to confirm contractual terms but also all HR matters. CONTRACTS OF EMPLOYMENT AND EMPLOYEE HANDBOOK Contracts of employment and the company handbook should be examined to establish who has or has not a signed contract and handbook; how old they are and how robust they are. Also, any collective agreements should be examined. Caroline Mcenery, Managing Director of The HR Suite is also author of The Art of Asking the Right Questions, a manager’s toolkit on all Hr-related tips to pro-actively manage your team