Tupe employee rights in pre pack administration sale takeover?

maz_hartley

In a pre pack administration sale where a company is bought out of administration and the employment is continuous what are the TUPE terms. I know that the employees existing terms have to be honoured. But in the case of the company taking over who say offers their staff better terms like more holidays and higher rate of pay do they have to honour these better terms to the staff their taking on or can they keep them on the existing terms if the previous employer?

Thrugelmir

There's a risk that the new employer may make redundancies. Prior to bringing the remaining TUPE employees into line. 

Undervalued

maz_hartley said:

In a pre pack administration sale where a company is bought out of administration and the employment is continuous what are the TUPE terms. I know that the employees existing terms have to be honoured. But in the case of the company taking over who say offers their staff better terms like more holidays and higher rate of pay do they have to honour these better terms to the staff their taking on or can they keep them on the existing terms if the previous employer?

Basically no. In general there is no right to better terms just because other employees have them (unless the real reason amounts to unlawful discrimination e.g race, religion, gender etc).

The TUPE should preserve your existing terms at the time of transfer, however once you are there the new employer could still change the terms in the same way the older employer would have been able to have done).

Jillanddy

maz_hartley said:

In a pre pack administration sale where a company is bought out of administration and the employment is continuous what are the TUPE terms. I know that the employees existing terms have to be honoured. But in the case of the company taking over who say offers their staff better terms like more holidays and higher rate of pay do they have to honour these better terms to the staff their taking on or can they keep them on the existing terms if the previous employer?

No they don't have to offer you the better terms. If you actually transfer, then your existing terms ought to stay in place. I say ought to rather that do because there are some additional factors that may weigh in where a company is bought out of administration. These may seriously undermine the TUPE protections (not that many of them are all that protective when it comes down to it). You should be asking the administrators exactly what terms they are discussing. Just because your company is in administration does not mean they don't have to inform and consult. 

Thrugelmir

The administrators have no say or influence over what the new employer may do. Their responsibilities end once the employees are TUPE'd. 

Jillanddy

Thrugelmir said:

The administrators have no say or influence over what the new employer may do. Their responsibilities end once the employees are TUPE'd. 

That is true. But they do have the same legal responsibilities for ensuring that employees are informed / consulted - or at the very least informed - as the employer from which they are being TUPE'd. Their responsibilities only end at the TUPE if the TUPE is conducted in a legal manner. However - and I really don't know a lot about this, just stuff that I have come across - sometimes, when a company is in administration there are different factors that can come into play that wouldn't normally apply to TUPE. One that I have personally seen meant that the transfer was effected with employees losing all their continuous service. I put my hand up - I don't understand why, but apparently it was entirely lawful, which I thought was criminal that the administrators could do that. But they could and did. There's some kind of "special status" that can be accorded to the transfer, and I totally forget the initials / name that was used. It enables administrators to do things that employers couldn't. So if anyone knows what that is, then it is definitely useful information.

Thrugelmir

Jillanddy said:

Thrugelmir said:

The administrators have no say or influence over what the new employer may do. Their responsibilities end once the employees are TUPE'd. 

 Their responsibilities only end at the TUPE if the TUPE is conducted in a legal manner.

Administrators are licenced. Matters will be legally watertight. Not in their interests to be otherwise. 

Jillanddy

Thrugelmir said:

Jillanddy said:

Thrugelmir said:

The administrators have no say or influence over what the new employer may do. Their responsibilities end once the employees are TUPE'd. 

 Their responsibilities only end at the TUPE if the TUPE is conducted in a legal manner.

Administrators are licenced. Matters will be legally watertight. Not in their interests to be otherwise. 

Yes I know. But the OP asked a question about TUPE in administration so I answered with what I knew. Administrators, just like employers, can make errors.

Sandtree

maz_hartley said:

In a pre pack administration sale where a company is bought out of administration and the employment is continuous what are the TUPE terms. I know that the employees existing terms have to be honoured. But in the case of the company taking over who say offers their staff better terms like more holidays and higher rate of pay do they have to honour these better terms to the staff their taking on or can they keep them on the existing terms if the previous employer?

If the administration ends with the sale of the company itself then there are is no TUPE because you were employed by ABC Limited and are still employed by ABC Limited. The fact that ABC Limited has new shareholders is irrelevant.

If ABC Limited isn't bought however but instead all the assets etc are bought by XYZ Limited inc the employees then TUPE potentially applies because your employer has then changed.

maz_hartley

Sandtree said:

maz_hartley said:

In a pre pack administration sale where a company is bought out of administration and the employment is continuous what are the TUPE terms. I know that the employees existing terms have to be honoured. But in the case of the company taking over who say offers their staff better terms like more holidays and higher rate of pay do they have to honour these better terms to the staff their taking on or can they keep them on the existing terms if the previous employer?

If the administration ends with the sale of the company itself then there are is no TUPE because you were employed by ABC Limited and are still employed by ABC Limited. The fact that ABC Limited has new shareholders is irrelevant.

If ABC Limited isn't bought however but instead all the assets etc are bought by XYZ Limited inc the employees then TUPE potentially applies because your employer has then changed.

I’m assuming the last point you quoted applies as were changing over to a different company the old company will cease thanks

maz_hartley

Sandtree said:

maz_hartley said:

In a pre pack administration sale where a company is bought out of administration and the employment is continuous what are the TUPE terms. I know that the employees existing terms have to be honoured. But in the case of the company taking over who say offers their staff better terms like more holidays and higher rate of pay do they have to honour these better terms to the staff their taking on or can they keep them on the existing terms if the previous employer?

If the administration ends with the sale of the company itself then there are is no TUPE because you were employed by ABC Limited and are still employed by ABC Limited. The fact that ABC Limited has new shareholders is irrelevant.

If ABC Limited isn't bought however but instead all the assets etc are bought by XYZ Limited inc the employees then TUPE potentially applies because your employer has then changed.

Although we were in a franchise with the company that has taken over and used their name but not actually owned by them until now if that makes any difference to the TUPE situation, thanks