Redundancy - unfair or legit?

[Jane2019]

Hi

Need some expert advice. My company has put me under consultation citing business needs to cut costs. At the same time, the business is being sold to a new buyer, the purchase which will complete near the end of the year. I've been told the two things are unrelated; however, I have been asked to work to the end of the year by which time the new owner will be in place. I believe my employer wants me to stay to end of year so I can help facilitate the transfer of assets, contracts, etc. but the expectation is that I will leave once the new company has taken ownership.

I have been offered a decent severance package and have been told this is being treated as a straight forward redundancy. However, the fact I've been asked to stay for an extended period, makes me think the redundancy is not linked (at least not exclusively) to cost cutting. After all, how are they saving money if they continue to pay up until the company sale?

Is my employer acting appropriately? How can they cite cost cutting as the reason for redundancy if I am being asked to stay until after the sale has closed?


Thanks

[ULA]

So if one company is buying out another then there is the possibility of what is called a TUPE transfer, however I cannot say this is the case as you have not provided any details on this, such as whether any staff will move to the new business.

If this is a TUPE situation then before such a transfer, the old employer may decide to make employees redundant for reasons unrelated to the transfer. In your situation, the old employer is claiming cost cutting which could be justifiable, excepting that they are asking you to stay until the point the business transfers to the new owner.

Sometimes the new owners does not want all the staff and in which case the prospective owners may make it a condition of taking over the business, either formally or informally, that the current managers dismiss employees as redundant before the transfer. In which case it may be considered that the TUPE transfer is in fact the sole or principal reason for such dismissals. This means that there is no "economic, technical or organisational” defence and the redundancy may be automatically unfair.

I am not saying that the above is the case but you may consider, if you want to, speaking to your manager or HR re your concerns that the reasons being given for your redundancy and their actions in wanting you to stay do not make sense.

[Jane2019]

Thank you. For clarity, I have been told my department is being closed completely as there is no need for it, as part of the cost cutting exercise. No one seems to be able confirm whether any existing staff staying to end of year would be transferred. My assumption is no given they have provided me with a firm departure date. Does accepting a redundancy offer with a hard departure date prejudice my option to transfer? I.e. does redundancy automatically disqualify me from a TUPE process or could that still apply?

[ULA]

I am only guessing here with not detail to support this theory form what you have said but it may be that not all of the business is being bought by the new potential owner and that part of it that is remaining with the current employer is being restructured with departments being closed completely.

Maybe you have the answer in which case that would be useful information for you to post up or it may be something that you can find out.

[Jane2019]

The company is being broken up. Certain assets will remain with the current owner. Several divisions, including the one in which I work, is being sold to the new buyer who will absorb those assets.

[ULA]

TUPE is quite complex but if your division is being sold to the new buyer then any decision to make you redundant by the current employer, will need to be very clearly for a reason unconnected to the transfer, as I have set out in my earlier post #2.

[Jane2019]

But if accept redundancy and a fixed departure date now, am I then excluding myself from a future TUPE?

if I wanted to be considered for a TUPE would I need to challenge the redundancy proposal as it stands now?

Im not averse to departing the business, but my feeling is that if the reasons for it are not fair then my employer should consider a settlement and an improved package.

[ULA]

You would need to challenge that your redundancy is not for reasons unrelated to the sale of the business and that in fact the TUPE transfer is the sole or principal reason for such dismissals. This means that there is no "economic, technical or organisational” defence and the redundancy may be automatically unfair. In which case you could potentially argue that you should be considered as part of the TUPE transfer of jobs across to the new owner.

[Jane2019]

Apparently TUPE doesn’t apply as this is a share purchase where the buyer is a buying out company outright. So our contract of employment would continue.

However, I am being made redundant but staying until a while after the acquisition closes. I really don’t know if that is “fair” or not.

[ULA]

If you have found out it is a share purchase then generally TUPE will not apply. This is because the identity of the employer will not change after the purchase of the shares. There may be some relevance to TUPE depending on what happens to employees after the purchase process has concluded depending in how the business is integrated going forward.

However you have already been made aware your department is being shut down and staff will be made redundant.