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Analysis

Employees caught up in takeovers may lose rights post-Brexit

by Joel Baccas | 03.08.2018

Anyone who has seen their employer change as a result of a merger, takeover or acquisition will know it can be a nervous time for employees. However, the EU has given people in this situation rights and protections above and beyond those previously available in UK law. We face losing these rights after Brexit – especially if the “slash red tape” Brexiter faction get their way.

In 2006 the UK implemented the Transfer of Undertakings Protection of Employment (TUPE) Regulations, in line with EU directives setting out principles for what should happen when a business is transferred from one employer to another.

Under TUPE Regulation 7, if the sole reason for an employee’s dismissal is related to the sale of the business, that dismissal is automatically deemed unfair. This applies to dismissals both before and after the transfer of the business. Dismissed employees can therefore action claims of unfair dismissal under employment law.

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TUPE acts to ensure that employees’ relationships with the business remain unchanged as much as possible after a transfer. That means existing contracts of employment should continue on the same terms and be transferred, along with all existing rights and obligations, to the new employer as if the contract had been originally made with the new employer. This means that employers will face difficulties dismissing employees who do not accept new terms, especially if they are inferior to their original terms.

TUPE gives employees several other protections too, for example requiring employers to keep employees up to date and sometimes also to consult with trade unions when an employer is changing.

There is no certainty as to what would happen to TUPE on leaving the EU. However, given the repeated Brexiter calls to strip back “red tape” to encourage foreign investment into the UK, it is not a great leap to imagine this type of legislation either being heavily amended or removed entirely. This is a very real threat facing UK employees after Brexit.

During the referendum, it was hardly explained that a corrosion of people’s employment protections could be a consequence of Brexit. Now that the reality of what is at stake is starting to sink in, and if employees decide they don’t want to gamble their rights against the whims of deregulating Brexiters like Jacob Rees-Mogg or Boris Johnson, they should have a People’s Vote on the final Brexit deal.

Edited by Luke Lythgoe

One Response to “Employees caught up in takeovers may lose rights post-Brexit”

  • The TUPE regulations are already being flouted in our own NHS as super partnerships hoover up GP practices, and all Labour can do is fall out amongst themselves. Pathetic.