TUPE or not TUPE, that is the question

sangie595

steampowered wrote: »

The finding that there has not been a TUPE transfer is based on this statement made by the Op:

'The previous/old company (i'll call it A) was definitely purchased by the bigger company (B). Companies House say that A became a subsidiary of B'.

If that statement is correct, TUPE doesn't apply. The fact that the shareholders of company A have changed is not relevant from an employment law perspective.

TUPE does not apply in circumstances where the shares of company A have been sold to company B. This is the structure used for the vast majority of acquisitions of smaller companies by larger companies. TUPE only applies to an acquisition where there has been a business transfer rather than a share transfer (i.e. company A sells its business to company B; the existing shareholders of company A retain ownership of company A). The latter structure is rarely used as it is far more complicated and expensive than a straightforward share acquisition.

This can all be definitively verified by looking at company A's annual return which is publicly available for free on Companies House, as that will tell you who the shareholders of company A are.

I am aware that share takeovers do not involve TUPE. But there has been no mention of shares at all, so you are assuming the takeover was based on shares. All we know is that the new employer purchased the old company. But we do know that the OP had been told that they work for the new employer now, and that entity is paying them. In share takeovers the identity of the employer remains the same, as does the company. The evidence of the post in fact suggests that this is a buy out, and that TUPE applies.

Although, as I said, it isn't all that important to the question, since in either case terms and conditions remain the same until someone says otherwise.

steampowered

sangie595 wrote: »

I am aware that share takeovers do not involve TUPE. But there has been no mention of shares at all, so you are assuming the takeover was based on shares. All we know is that the new employer purchased the old company. But we do know that the OP had been told that they work for the new employer now, and that entity is paying them. In share takeovers the identity of the employer remains the same, as does the company. The evidence of the post in fact suggests that this is a buy out, and that TUPE applies.

Although, as I said, it isn't all that important to the question, since in either case terms and conditions remain the same until someone says otherwise.

The Op said that Companies House says company A became a subsidiary of company B. That can only happen by way of a share transfer.

My point is that if the acquisition was structured as a business transfer involving TUPE (rather than a share transfer), company A would not be a subsidiary of company B. In the case of a business transfer company A would still be owned by the former shareholders, and there would be no change shown on company A's filings with Companies House.

As you say it probably doesn't matter. The point being made here is that, in response to the question asked at the start of this thread, the Op can't start complaining about lack of consultation etc. under TUPE if TUPE doesn't apply.

sangie595

steampowered wrote: »

The Op said that Companies House says company A became a subsidiary of company B. That can only happen by way of a share transfer.

My point is that if the acquisition was structured as a business transfer involving TUPE (rather than a share transfer), company A would not be a subsidiary of company B. In the case of a business transfer company A would still be owned by the former shareholders, and there would be no change shown on company A's filings with Companies House.

As you say it probably doesn't matter. The point being made here is that, in response to the question asked at the start of this thread, the Op can't start complaining about lack of consultation etc. under TUPE if TUPE doesn't apply.

Rubbish. It does not require a share transfer for a company to become a subsidiary. That is about structure, not about "purchase" options. You may be correct, but there is no evidence whatsoever to support your claim here. Unfortunately, despite the law, TUPE consultation is often lacking. And the OP has not yet answered the point about recognised unions - in which case they would do the consultation.

It is quite true that the OP cannot complain about the lack of consultation if consultation isn't required. But there is no evidence to that fact. On the other hand, they can complain away - the reality is that this is their employer now, and that is the end of the matter. Unless they wish to be complaining without a job.

steampowered

sangie595 wrote: »

Rubbish. It does not require a share transfer for a company to become a subsidiary. That is about structure, not about "purchase" options. You may be correct, but there is no evidence whatsoever to support your claim here. Unfortunately, despite the law, TUPE consultation is often lacking. And the OP has not yet answered the point about recognised unions - in which case they would do the consultation.

It is quite true that the OP cannot complain about the lack of consultation if consultation isn't required. But there is no evidence to that fact. On the other hand, they can complain away - the reality is that this is their employer now, and that is the end of the matter. Unless they wish to be complaining without a job.

The definition of a subsidiary is a company owning the shares in another company.

Companies House tells you who owns the shares in a company. This information is clearly set out in the company's annual return.

The Op clearly explained that Companies House shows company B as the owner of company A. The only possible way for this to have happened is for the previous shareholders of company A to transfer their shares to company B. That is why Companies House now shows company B as the shareholder of company B, rather than the previous owners.

If company A had sold its assets and employees to company B through a business transfer, company A would still be owned by the previous owners. Admittedly company A might become a shell company at that point, but there would be no change of ownership filed with Companies House.

There is really nothing else I can say. As the Op told us Companies House shows company B as the owner of company A, we can be pretty certain that the transaction was structured as a share acquisition, which would not engage TUPE.

That said I won't be responding further as it seems the real life impact on the Op is limited either way. I hope he or she can take comfort from knowing which company he or she works for and whether or not TUPE is relevant.

sangie595

steampowered wrote: »

The definition of a subsidiary is a company owning the shares in another company.

Companies House tells you who owns the shares in a company. This information is clearly set out in the company's annual return.

The Op clearly explained that Companies House shows company B as the owner of company A. The only possible way for this to have happened is for the previous shareholders of company A to transfer their shares to company B. That is why Companies House now shows company B as the shareholder of company B, rather than the previous owners.

If company A had sold its assets and employees to company B through a business transfer, company A would still be owned by the previous owners. Admittedly company A might become a shell company at that point, but there would be no change of ownership filed with Companies House.

There is really nothing else I can say. As the Op told us Companies House shows company B as the owner of company A, we can be pretty certain that the transaction was structured as a share acquisition, which would not engage TUPE.

That said I won't be responding further as it seems the real life impact on the Op is limited either way. I hope he or she can take comfort from knowing which company he or she works for and whether or not TUPE is relevant.

You may argue for something not in evidence until the cows come home, but that does not make it correct. A subsidiary company is one wholly owned or controlled by another company - not a definition of how ownership was obtained. If they went down to the receiver and bought it, would that make it a subsidiary? Of course it would. If they bought it for cash, would that make it a subsidiary? Of course it would. If it is owned or controlled by another company, it is a subsidiary. The OP has never said that they read the annual report of the company and ascertained who the shareholders are - they simply said that one company owned the other one.

The other side of the equation is that n a share takeover, the identity and structure of the company remain unchanged. The evidence suggests that has not happened here. The OP says that the company was bought by the larger company, that the letterheads and emails have changed, and that they are being paid by the other company. That would suggest quite a lot of changes.

And I think you have lost track of what the OP asked. They didn't want to know about how their employment ended up with whichever company. They wanted to know about whether the new employer can make changes to working practices and terms. And since that was something they are struggling with, I doubt that they will take "comfort" in anything at all, since the only answer is yes, whether TUPE or not, they must follow the instructions of their employer, and terms only have some limited protection.

steampowered

If they went down to the receiver and bought it, would that make it a subsidiary? Of course it would. If they bought it for cash, would that make it a subsidiary? Of course it would. If it is owned or controlled by another company, it is a subsidiary.

Sangie, these are all situations where you buy the shares in a company. It doesn't matter whether the shares are being sold by a seller, a receiver or Mr Bean.

That is what shares are. The definition of shares is that they denote ownership of a company. The shareholders own the company. If you are not a shareholder of a company you don't own it.

You buy a company by buying the shares in the company. It is very common for a large company to buy a small company, and then arrange for the smaller company to change things such as the letterhead/emails etc.

sangie595

steampowered wrote: »

Sangie, these are all situations where you buy the shares in a company. It doesn't matter whether the shares are being sold by a seller, a receiver or Mr Bean.

That is what shares are. The definition of shares is that they denote ownership of a company. The shareholders own the company. If you are not a shareholder of a company you don't own it.

You buy a company by buying the shares in the company. It is very common for a large company to buy a small company, and then arrange for the smaller company to change things such as the letterhead/emails etc.

I'm not arguing about this any more. As I thought you were not.

Until such time as the employer confirms to the OP that there has been no TUPE, which would contradict the previous statement that there has been a TUPE, then I am going to assume that the OP and their employer(s) know what they are talking about. To ignore what has been said is to assume they are all idiots.

steampowered

I'll leave it there then as there is nothing I can add to my previous posts, all the best.