Business sales and TUPE

Business sales and TUPE – advice for employers

A business sale or acquisition is a significant milestone, bringing commercial opportunity alongside legal and operational risk. For employers, the impact on employees is often one of the most sensitive aspects of the transaction. Whether you are buying or selling, understanding and managing your employment obligations is essential to completing the deal smoothly and avoiding disruption or challenge.

At Coodes, our expert employment lawyers work closely with our corporate team to advise employers across the region on the employment aspects of business sales. We will ensure that your transaction progresses efficiently while safeguarding compliance and workforce stability.

Understanding TUPE obligations

New owners may want to restructure or reallocate resources, including closing sites and downsizing the workforce. Whatever the plan, from an employment perspective the starting point is your contracts of employment: in most cases, all of the current terms and conditions of employment will transfer automatically to the new employer under the TUPE regulations.

These requirements apply regardless of any commercial intentions to restructure, relocate or reduce headcount following completion. TUPE also imposes strict requirements around information sharing, consultation and employee protections.

Everyone involved in the transaction needs to understand – and accept – this fact and its implications. Prospective buyers need to fully understand the terms under which the staff they are taking on are employed and how those terms impact their plans and forecasts. This is an essential component of an effective due diligence process. Failure to fully understand employee terms and meet your obligations under TUPE can be very considerable, including significant financial penalty, erosion of staff morale and reputational damage.

Sellers, equally, must ensure accurate disclosure and compliance. In some circumstances, both buyers and the sellers may be held jointly liable for any breaches of TUPE, so it is important that you seek legal advice and act accordingly.

How we can help

Our experienced employment team advises both buyers and sellers throughout the transaction lifecycle. We can:

• Audit existing employment contracts and policies for sellers.
• Carry out employment due diligence for buyers, identifying risk and cost exposure.
• Advise on employee liability information, ensuring statutory requirements are met.
• Provide clear guidance on TUPE obligations, rights and restrictions.
• Support consultation and communication with employees, helping maintain confidence and clarity.
• Advise on proposed redundancies or restructuring, before or after transfer.
• Assist with post-transfer employment issues, including contractual changes.

TUPE issues can derail transactions if they are not addressed early in the transaction process. Specialist advice from our employment experts will ensure any risks are identified, costed and managed, protecting deal value and reducing the likelihood of disputes.

Other TUPE-related content:

The Labour Government’s planned changes to employment law