Company acquisition

JohnBravo

Hi Everyone,

I hope you are doing well.
The company I work for is in the process of being acquired. The purchase could still not go through but it's unlikely at this stage. It's a small limited company. Apparently our team is going to be merged into the purchaser's business, the existing director is likely to retire in 2 years. I have some CSOPs or SIPs, I have to find out which ones exactly.
I have never gone through this kind of scenario before myself however I have witnessed something similar and it was quite disruptive to the employees.
The new contracts are going to be offered at some point but I wonder how this usually pans out with the acquisitions. I think some people could be made redundant if not immediately then in maybe 2 years time. There are some foreign subcontractors involved as well.
Should I just sit and wait or consult this with a solicitor?
Do the new owner care about the old employment agreements or can they offer anything?
Just FYI I worked there for over 5 years.

Please advise
Thanks

Savvy_Sue

This is probably going to be covered by TUPE - Transfer of Undertakings Protection of Employment. I say probably because there are some situations where it doesn't apply. 

Under TUPE, the new employer can't say "I'll take on all the old staff but cut their pay by 50%", but they can - and often do - change contracts afterwards and / or make redundancies. 

Rather than a solicitor, I'd have thought you and your colleagues joining a union was likely to be more helpful! And Google will also give you some answers. 

JohnBravo

I have checked online and it looks like TUPE applies as the business will carry on its functions “an economic entity which retains its identity” however rebranding is soon to be expected.

When it comes to forming a trade union there isn't many people. I would say 60%+ is subcontracted and abroad so different rules apply to them.

CKhalvashi

It's likely that TUPE wouldn't be part of the deal initially, assuming the entity is sold. Nothing in this case legally will change in terms of contracts, although the day to day realities of the job may a little.

If the business were to be transferred to a different entity (some are hesitant to do this, others are not), then TUPE will apply. This doesn't stop redundancies or restructuring later, but does protect immediately. We do have a limited number of 'bolt ons' which work with a 'main' company in its own name, but we typically retain them as distinct entities for operational purposes, so the actual structure of the deal will be important to how any rights may be affected in this case.

Marcon

JohnBravo said:

Hi Everyone,

I hope you are doing well.
The company I work for is in the process of being acquired. The purchase could still not go through but it's unlikely at this stage. It's a small limited company. Apparently our team is going to be merged into the purchaser's business, the existing director is likely to retire in 2 years. I have some CSOPs or SIPs, I have to find out which ones exactly.
I have never gone through this kind of scenario before myself however I have witnessed something similar and it was quite disruptive to the employees.
The new contracts are going to be offered at some point but I wonder how this usually pans out with the acquisitions. I think some people could be made redundant if not immediately then in maybe 2 years time. There are some foreign subcontractors involved as well.
Should I just sit and wait or consult this with a solicitor?
Do the new owner care about the old employment agreements or can they offer anything?
Just FYI I worked there for over 5 years.

Please advise
Thanks

Checking would be a good idea, although if you don't even know what you've got, why worry too much about losing it (always assuming you do)? This is the perk most likely to be affected by any acquisition - a small private company's shares don't have an objective value in the same way a public company's share value can be established on a daily basis, depending on the price at which the shares trade.

What exactly would you ask a solicitor to do? Until there's definite information, it would be a complete waste of money, because all they can 'advise' is to wait and see.

It's very unsettling for you, but there is no 'usually' as to how things will pan out - but absolutely no sense in fearing the worst, although that's much easier said than done.

On-the-coast

are you a key employee (technical know how etc?)
I’ve known such individuals being offered retention bonuses in these circumstances. 

tacpot12

You really have just two options: leave now to avoid all the disruptions or stay until either you can't stand it any longer, they make you redundant or they confirm you are keeping your job.

No need to consult with a solicitor if you have Home Insurnace with legal expenses cover. This will cover the cost of legal representation if they dismiss you unfairly, or don't pay you what your are owed. 

DullGreyGuy

TUPE will apply if they legally change who your employer is, but you say they are buying the company itself in which case TUPE may not apply because your employer may stay as ABC Ltd just the shareholder of ABC Ltd changes. There are overheads in running multiple legal entities and so it may be straight away or in a few years that they do do a transfer to their legal entity at which point then TUPE applies.

How close are you to the deal makers, particularly those on the buy side? Depending on the reason for the acquisition there are many different paths it can take and not always the one that the people on the ground fear. In the last merger I managed there were some in a technical team that were convinced that they'd be looking at economies of scale and making people redundant from the sellers side but in reality the exact opposite happened, where they'd previous outsourced and used contractors for 2/3 the work the buyer really wanted to push the service and insourced the lot so the newly combined team grew rather than shrunk after the deal was done.

As to the OP... depends what sort of person you are, if you hate change and uncertainty then it may be worth considering your options. If you are comfortable living with these things then it may be an opportunity rather than a detriment but only time will tell. 

Brie

The situations like this I've seen there was TUPE in place and therefore there was an extension of all the employment rights for 2 years.  So no changes to benefits, continuing to accrue service as if in the original company, same holidays etc. 

In one situation about a year after the TUPE was put in place all the jobs were off shored so everyone TUPEd were made redundant so were redundant on the original company's terms with all those years of service plus the one year with the new company.  Not too bad a result generally. 

Next time I saw this the new company waited to make TUPEd people redundant 25 months after the start so it was all on just their terms and service so just 2+ years not the 20+ some of the people had been doing in the job.  It was rather heartbreaking to witness frankly as the timing was so blatantly used to lessen the costs to the acquiring company.  That said the alternative was that the individuals could have quit and got no redundancy whatsoever.  

JohnBravo

On-the-coast said:

are you a key employee (technical know how etc?)
I’ve known such individuals being offered retention bonuses in these circumstances. 

yes, I am technical but am I indispensable?
I reckon no one is indispensable
Thank you

JohnBravo

DullGreyGuy said:

TUPE will apply if they legally change who your employer is, but you say they are buying the company itself in which case TUPE may not apply because your employer may stay as ABC Ltd just the shareholder of ABC Ltd changes. There are overheads in running multiple legal entities and so it may be straight away or in a few years that they do do a transfer to their legal entity at which point then TUPE applies.

How close are you to the deal makers, particularly those on the buy side? Depending on the reason for the acquisition there are many different paths it can take and not always the one that the people on the ground fear. In the last merger I managed there were some in a technical team that were convinced that they'd be looking at economies of scale and making people redundant from the sellers side but in reality the exact opposite happened, where they'd previous outsourced and used contractors for 2/3 the work the buyer really wanted to push the service and insourced the lot so the newly combined team grew rather than shrunk after the deal was done.

As to the OP... depends what sort of person you are, if you hate change and uncertainty then it may be worth considering your options. If you are comfortable living with these things then it may be an opportunity rather than a detriment but only time will tell. 

I mean I use to work 25-30% on site but due to lockdowns and all of that what happened after 2021 this was no longer the case and I switched to remote work full time. We don't have an office either, use to go onsite to clients. These changes also in the working environment pushed me to move out the city and to buy a property somewhere else. I cannot imagine if they ask me maybe not now but in a year or 2 to commute to their office, it's too far.

I gotcha ya TUPA if it would apply but later.
Since I and few others are with this company for quite some time now it is kind of a new experience but nothing lasts forever, right?