Company aquisition query/advice

[JimmyS]

Hi,

I'm just wondering if anyone has any advice or opinion on a company acquistion matter.

The small company I work for has recently been acquired by a much larger company, which is potentially great news for the small company's evolution, but my colleagues and I were not informed in advance that it was going to happen. I believe that it is a legal requirement for an employee to do so. The company is, or was, only small - just 5 employees. Three of us have been there since it was set up 15 years ago. For the five years prior to that, two us worked with the the person who started and became director and sole owner of the company. Frankly, without us he wouldn't have got the company off the ground. Three of us in particular have, over the years, worked long hours (no overtime) to make the company a success, and we are all quietly proud of what we have achieved. I'm aware that the owner took on the full weight of directing the company, and made some risky personal financial commitments, but the success has been very much a team effort. I guess we thought that if a day came when he sold the business, we would reap some benefit - maybe a handsome bonus of some kind - and at the very least be warned in advance, but that hasn't happened. There are no signs that we will see a share of the windfall. We've been told that the new owners will give us a small pay rise which, frankly, feels like a bit of a kick in the teeth. The director has said they intend to stay for at least three years and expects/hopes all of us do the same, to complete the ongoing projects, but I for one feel let down and hugely demotivated.

I'm wondering if anyone has some sound advice on how best to discuss it with the original [now rather wealthy] owner, and also with the HR dept of the new owners. Confrontation is not something I enjoy or am particularly good at.

Thanks.
JS

[ULA]

I presume the original owner has 100% of the shares? Did the person ever speak to you or detail anything in writing about any form of bonus on "sell-out" to those of you that have been there since the start? If this subject has never come up over the 15 years either verbally or in writing there is nothing legally you have to support a request to the original owner for a share of anything gained financially from the sale. I understand given the efforts you have put in to make the business a success for the owner it is very disappointing if this is not acknowedged in some way but you may need to consider your relationship with the person and think how best to approach this if you are still inclined to do so.

In regard to the new company they would probably not want to get involved in any discussion on this matter as it is between you and the previous owner.

In terms of the TUPE transfer itself the old and new employers must consult about the consequences of the TUPE transfer. The obligations apply regardless of the size of the employer. If the employer fails to abide by the TUPE regulations, then potential there is a cliam for 13 week gross pay penalty for each affected employee. Depending on circumstances, liability is joint and several between the old and new employers.

[JimmyS]

Many thanks for the reply.

Yes, the original owner held 100% of the shares, and I have no memory or record of a conversation about a bonus in the event of a sale, unfortunately. I now see that this was a mistake, albeit an easy mistake to make, given that it involved someone I regarded as a friend/close colleague. I will tread carefully and see how things pan out over the next few months. I am mostly irked by the fact that the owner failed to consult with us in advance, which is not only illegal, it would appear, but disrespectful.

J.

[Manxman]

Does TUPE apply to a straightforward sale of a business/transfer of ownership?

eg my understanding is that if you are employed by "Company A" which is owned by person B who sells it, TUPE does not apply if you continue to be employed by "Company A" - ie there is no change of employer.

so has your employer changed or just ownership of your employer?

[ULA]

If under the share sale, the legal identity of the employer of the business changes then under these circumstances TUPE will apply. So if the sold business is no longer know as ABC Ltd but becomes part of XYZ Ltd (the new company) then there is a change of legal identity meaning TUPE will potenailly apply.

[Manxman]

But if the employer remains the same entity, and has merely been sold and bought, TUPE does not apply?

(an example would be where Mike Ashley/Sports Direct empire bought businesses such as Sweatshop, Karrimor, Field & Trek, Evans Cycles etc, but an outsider would never have known because the businesses retained their own separate identities and are/were not part of the Sports Direct brand).

If I were the OP I'd confirm what has happened before relying on TUPE.

[JimmyS]

Interesting. I am still employed by "A", where A was the name of the company before it was sold. I guess TUPE may not apply then.

[ULA]

If you are still employed by "A" as the same legal entity after the sale to this large company, then no TUPE regulations should not apply, including the requirement to consult.