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Tupe Loopholes?

Discussion in 'Legal' started by ahoythere48, Mar 9, 2012.

  1. ahoythere48

    ahoythere48 UKBF Newcomer Free Member

    Posts: 11 Likes: 0
    Currently looking at purchasing a business where 4 staff members will be transferred over to the new business. The business will be changing from a sandwich shop to a specialist coffee house. I will not be be selling sandwiches but be selling specialist coffee. I will be employing trained baristas to make and sell the coffee's. The 4 tupe staff will be superfluous to requirement. What's the procedure for removing them from the business? Do i have to make them redundant? Possibly i could arrange with the vendor to make them redundant before i take on the business. Other ways?

    I'm very green in this area and so any advise would be more than welcomed.
    Posted: Mar 9, 2012 By: ahoythere48 Member since: Feb 16, 2012
  2. MrsF

    MrsF UKBF Newcomer Free Member

    Posts: 136 Likes: 27
    I believe in this instance it would be for the current employer to make them redundant before you take the business over.
    Posted: Mar 9, 2012 By: MrsF Member since: Jan 22, 2009
  3. DaveDAC

    DaveDAC UKBF Newcomer Free Member

    Posts: 86 Likes: 24
    You can agree anything you want with the vendor. In larger sales of businesses I have been involved in, the TUPE warranties and indemnities have sometimes been drafted so that the vendor indemnifies the buyer against all costs, losses, damages and payments associated with the buyer making the employees redundant after buying the business. I am no expert on this but assume a simpler method would be to get advice on what the reduindancy costs will be and negotiate a corresponding deduction from the purchase price.

    I hope someone with genuine expertise in this area can respond to your thread, because I also think it might be worth getting advice on whether TUPE applies or whether the deal can be structired in such a way that TUPE doesn't apply. For example, if you are not going to continue the business as it is currently operated and are really just taking on the lease and some fixtures and fittings, maybe you are not buying the business from a TUPE perspective? Unfortunately I have no idea, but think it worth at least considering.
    Posted: Mar 9, 2012 By: DaveDAC Member since: Jan 26, 2012
  4. sjbeale

    sjbeale UKBF Ace Full Member

    Posts: 1,200 Likes: 208
    With such a transfer you would be buying the business and the staff so TUPE would probably apply. Having then done so you could restructure the employees out on an ETO reason, but you would have to follow the correct procedure. If you need help email me at info@sjbealehrconsult.co.uk
    Posted: Mar 9, 2012 By: sjbeale Member since: Jul 8, 2005
  5. ahoythere48

    ahoythere48 UKBF Newcomer Free Member

    Posts: 11 Likes: 0
    Thanks for your replies.

    Restructuring on an ETO basis would presumably mean i would legally be entitled to make them redundant. A costly affair for a new business but if that's the only way of removing them....
    I guess it would be no easier for the vendor to make them redundant and close down the business as it would probably be me paying him to do this.

    What does one pay in redundancy payouts?

    All seems massively time consuming and laborious this business ownership malarky!
    Posted: Mar 9, 2012 By: ahoythere48 Member since: Feb 16, 2012
  6. APC RoadLink

    APC RoadLink UKBF Regular Full Member

    Posts: 180 Likes: 22
    Posted: Mar 9, 2012 By: APC RoadLink Member since: Feb 4, 2010
  7. TotallySport

    TotallySport UKBF Legend Full Member - Verified Business

    Posts: 6,959 Likes: 1,029
    surely you could find them alternative roles, cleaner, pot wash, or why not offer to retrain them.
    Posted: Mar 9, 2012 By: TotallySport Member since: Jul 18, 2007
  8. ahoythere48

    ahoythere48 UKBF Newcomer Free Member

    Posts: 11 Likes: 0
    Yep, some good points. Thanks for your help people.
    Posted: Mar 9, 2012 By: ahoythere48 Member since: Feb 16, 2012
  9. arcon5

    arcon5 UKBF Ace Free Member

    Posts: 2,557 Likes: 495
    Would there be a way round it by setting up a new company and merely buying the assets and goodwill leaving the staff with the old company?
    Posted: Mar 9, 2012 By: arcon5 Member since: Sep 6, 2006
  10. ahoythere48

    ahoythere48 UKBF Newcomer Free Member

    Posts: 11 Likes: 0
    Quite possibly. I'm going to have see a specialist to be advised professionally. Thanks for your comments though.
    Posted: Mar 10, 2012 By: ahoythere48 Member since: Feb 16, 2012
  11. kulture

    kulture UKBF Legend Staff Member

    Posts: 7,259 Likes: 1,964
    Silly question but are you actually buying the business or are you buying the lease? I ask because if you are buying the sandwich shop and then not doing sandwiches it does seem that you have no use for the goodwill, nor the staff, nor the suppliers, nor the stock.
    Posted: Mar 10, 2012 By: kulture Member since: Aug 11, 2007
  12. ahoythere48

    ahoythere48 UKBF Newcomer Free Member

    Posts: 11 Likes: 0
    That's exactly it. In order for me to obtain a shop in my chosen location it appears i will have to buy an existing business for sale. In this case i might have to buy a sandwich shop in order to set up my business. Would love to be just taking on a fresh lease but there are business's attached to these leases. Possibly if a business was desperate to get out i could negotiate a small sum for the business to go into liquidation or dissolve and i take the lease. But quite a costly affair for a business to wind up and deal with redundancies. Hope that shed's some light on the situation.
    Posted: Mar 12, 2012 By: ahoythere48 Member since: Feb 16, 2012
  13. Bobbyboo

    Bobbyboo Guest

    Posts: 1 Likes: 0
    Can any one advise I am a small family business I quoted a small 3hour a week contract and got it , it goes out to tender every year , after I cleaned twice I got a phone call from previous contractor demanding I have to take on there cleaner under tupe law , first I had heard about it , i had nothing in writing before I took the contract on , from what I have read the previous contractor has to advise me at least two weeks before with all these details about there employee , well they never , I have since had two letters from the cleaner , a phone call from her threatening me with tribunal , Surely this can't be right I should have been told and as this contract is for a year at a time does tupe apply when it's just for three hours
    Posted: May 5, 2012 By: Bobbyboo Member since: May 5, 2012
  14. Employment Law Clinic

    Employment Law Clinic UKBF Big Shot Full Member - Verified Business

    Posts: 3,016 Likes: 1,419
    Hi Bobbyboo,

    You should have been told about any staff - given the Employee Liability Information - in advance of the contract transferring.

    TUPE would apply regardless of the few hours involved, and the cleaner may well have a claim against you; it does appear to be a clearly defined entity that transferred.

    On the plus side, you probably have your own claim too - against the previous contractor, for not providing the necessary information in advance. The usual time-limits for employment tribunals of 3 months apply, so you should explore that option to protect yourself against the possible loss from the cleaner's claim.

    Karl Limpert
    Posted: May 9, 2012 By: Employment Law Clinic Member since: Aug 10, 2009