My employer has been taken over. Can they sack me?
When your employer’s business (or part of it) has merged with or been taken over by another business, you might find yourself working for a new company and could therefore be wondering where this leaves you.
The good news is that your employment contract is automatically transferred over to your new employer. Your pension scheme might be transferred as well, but it’s a bit more complicated as explained below.
You’ll find the basic information you need in this article. For details about your specific situation, please give us a call and we’ll talk it through.
Transfer of your employment contract
Your terms and conditions of employment will be unchanged when you switch employers. This is due to a piece of legislation called Transfer of Undertakings (Protection of Employment) Regulations 2006 – known as TUPE (pronounced too-pee).
TUPE means things like your working hours, salary and holiday entitlement will stay the same. You retain continuity of employment. You also maintain your employment rights (and your new employer retains the former employer’s liabilities).
TUPE applies where the identity of your employer changes. It doesn’t apply if share-holder changes but the identity of your employer stays the same.
TUPE protects you in various other circumstances involved with business transfers, including:
- If you are staying at the old employer (under the new name)
- If you’re moving to the new employer
- If new employees are joining you
- If in-house services are outsourced
- If outsourced services come back in-house
- If a contract ends and is given to a new contractor
Your new employer can make changes to your terms and conditions later, for “economic, technical or organisational reasons” – but only if you agree and the changes are not related to the transfer.
Transfer of your pension
The situation is different depending on whether you work in the public or the private sector, and the type of pension scheme you have.
If you work in the private sector…
Your new employer doesn’t have to match the pension you had before – it depends on your old employer’s pension arrangements.
If you work in the public sector…
There’s an arrangement called Fair Deal for Pensions which means you should be offered continued membership of your existing pension scheme.
If you work for a local authority…
You should be offered a “broadly comparable” pension scheme.
If your old employer is contracted to pay a percentage of your wages into your own personal pension scheme…
On a TUPE transfer, this promise must be honoured by your new employer.
What your old employer should do
If your employer is going to change, you must be given advance notice before it happens. They should tell you:
- That a transfer is taking place
- The date of the proposed transfer
- The reason for the proposed transfer
- The “legal, economic and social implications” of the transfer such as whether your employment automatically transferring to the new employer, your continuing employment rights, any major changes such as a new location or potential redundancies, any “envisaged measures” that the new employer might take, including a change in the date you get paid or a new holiday year
If your terms and conditions are expected to change, or your pension, or the way you work, your employer is legally required to consult all affected employees in advance (this will be done through your union if there is one where you work).
If your employer fails to follow a proper process, you can make a claim against them (as long as it’s within three months of the transfer) and you could win up to 13 week’s pay – this is called a “protective award”.
Your new employer is not allowed to make your job redundant before the transfer, because that would count as unfair dismissal and you could make a claim against them.
What you can do
If TUPE doesn’t apply to your situation, you need to consent to be transferred to the new employer and will retain your service record.
If you don’t want to be transferred to the new employer, you can resign. But that’s your choice, and you can’t go on to claim for redundancy or unfair dismissal.
Would you prefer to be made redundant? That’s possible, but only if more than 20 employees are involved in the transfer, consultation starts before the transfer, and both your old and new employers agree.
If you don’t like working for the new employer, you can resign. Again, you can’t claim for redundancy or unfair dismissal (unless you’ve been mistreated there).
Further reading
If you found this useful, you might also like to read some of our other articles on the subject:
- What is TUPE?
- What does TUPE mean?
- What can you learn from the P&O redundancies?
- Can you be sacked before you start work?
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