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Restructuring Your Business

BPE provides sound commercial legal advice throughout each lifestage of a business, whether it's changing the structure of the business from sole trader to a limited company or partnership or appointing sales agents, building or taking on a franchise or valuing your business for investment.

Dealing with Staff

Consulting with staff

If you are considering making changes to your business that will affect the jobs your staff do, you must nearly always consult with them about the changes before they are implemented. This type of change normally include changes to terms and conditions of employment, reorganisations, redundancies, the sale of a business and the transfer of a service provision.

The type of change to be implemented will dictate exactly what type of consultation is undertaken and how that consultation should be handled. Broadly speaking however, the consultation should be started with the intention of seeking ways to minimise the affect of the changes planned or to avoid them altogether. This consultation may need you to consult with unions if any staff are union members.

If you don't  consult properly, your business is exposed to Employment Tribunal claims of unfair dismissal and/or failure to follow proper consultation procedures. The financial liability for your business can be significant, especially if there are a lot of staff involved.

How do I deal with staff as part of a business restructure?

If you're looking at restructuring your business you may need to make redundancies and/or other changes to the terms and conditions of your staff contracts of employment. We can advise on your legal obligations when you restructure your business.

Communicating with staff about a business relocation

If you are looking to relocate your business, your staff may be obliged to move with you if you've included a mobility clause in their employment contracts, unless they can prove the request is unreasonable. Long distance moves may well be unreasonable. Employees without a mobility clause in their contract can choose whether to move or not.

A move could be deemed 'unreasonable' if it affects a child's education, involves a difficult journey or involves significant additonal expenditure for an employee. If staff do not move with you to your new premises, you may well have to make them redundant, unless you can show it was unreasonabl for them to not do so. Before you impose any change of location, you should consult all affected staff.

If you need advice on how relocation could affect your staff and the options you have, our team can help.

Acquiring a new business and inheriting staff

Generally speaking, you will acquire a business either by an asset purchase or a share sale.

If you acquire a business by a share sale, the legal entity which employs staff does not change. Because of this, there will be very little change to the employer/employee relationship.

If you acquire a business by an asset purchase, it is likely that the Transfer of Undertakings (the Protection of the Employment) 2006 applies. This means that you normally step into the shoes of the purchaser and that you inherit most obligations and liabilities from the seller. In this situation, you are generally very limited as to what you can do in terms of changing the terms and conditions of employment of those staff which you have acquired (with a limited number of exceptions).

If you have won a new contract, the Transfer of Undertakings (Protection of Employment) Regulations 2006 are likely to apply also. Again, you are likely to acquire those staff employed on the contract you have won on the same terms and conditions of employment and you will have limited ability to change those terms. You will also acquire any obligations and liabilities from the business that has lost the contract automatically by law (with a limited number of exceptions).

If you are acquiring a business, you would be advised to seek help in relation to warranties and indemnities. You should think about protecting yourself against any liability that you may inherit from the seller or the business that has lost a contract to you.

Redundancies or changes to employment terms

If you are consolidating your business you may well have to consider redundancies and/or changes to terms and conditions of employment. You must consult properly about both those scenarios in order to avoid a successful claim in an Employment Tribunal against you for either unfair dismissal or unlawful deduction from wages/breach of contract. Depending on how big your consolidation is, it may well involve a signficant number of staff which could equal significant financial liability if things go wrong.

We regularly help businesses out in relation to the consolidation of their business in terms of redundancy and re-organisation advice. Please call our team if you would like help with your business consolidation.

Collective consultation

If you have an obligation to collectively consult staff, improper redundancy consultation can result in claims of up to 90 days' pay per employee affected. It is therefore crucial that you get this right or you may also face individual claims of unfair dismissal once you have made an individual redundant.

Good redundancy consultation involves clear planning and meaningful dialogue with employees who are affected. As an employer, you have an obligation to consult individually with staff (and perhaps collectively depending on how many staff are at risk of redundancy) about your redundancy proposals. Amongst other things, you also have an obligation to seek ways to minimise the number of redundancies that you are planning.

Our Employment Team regularly advises companies of all sizes on both individual and collective consultation processes. We also have experience of advising on redundancy processes as part of the purchase of a business and when businesses win work contracts and need to reduce head count. Please call our Employment Team if you would like further assistance.

Changing an employees' terms and conditions

As your business grows, it maybe necessary to change your employees' terms and conditions of employment. Unless you have a contractual right to change those terms and conditions (which is rare) you should properly consult with staff about why the changes are needed and ways in which the effects of those changes can be mitigated. You may need to consult with recognised trade unions if affected staff are trade union members.

In the worst case scenario, improper or poorly thought through consultation can result in constructive unfair dismissal claims, work to rule or unlawful deduction from wages/breach of contract claims for staff.

Developing staff

Well thought through and carefully implemented development plans for individual staff are a key part of any successful business.  Not only can they help staff achieve goals (which could lead to additional financial comensation) but they also reduce staff turnover and aid promotion of talent in yor business.

We can help you devise and implement development plans tailored to your business.

Acquiring staff under TUPE

TUPE is a complex bit of law. In short, if you acquire staff under a TUPE transfer (asset purchase or service provision change) you acquire those staff under the vast majority of their existing terms and conditions of employment. You are also limited as to your ability to change those terms and conditions after the TUPE transfer. You will also acquire all obligations and liabilities from the seller of the business you have acquired or the outgoing service provider. Because of this, you should seek advice before the TUPE transfer takes place to identify and, if appropriate, mitigate any risk you may acquire in relation to those staff who transfer to you under TUPE. In conjunction with our Corporate & Commercial Team, we are able to advise businesses of all sizes on how to mitigate this TUPE risk.

How do I manage Trade Unions?

Legislation dealing with industrial relations with Trade Unions and Trade Union strikes is complex. It also normally involves signifcant numbers of staff which has the potential to be financially damaging to businesses if things go wrong.

We have a wealth of experience (including a team member who worked for the EEF in a highly unionised environment for a number of years) in regularly handling all forms of trade union and collective consultation issues. We work with clients to resolve industrial relations issues efficiently and effectively, making sure any disruption to your business is kept to a minimum.

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