re-employment offer - no redundancy - legal?

[lilly3333]

Evening - thanks for reading, all info is gratefully appreciated,

My partner came home with the following info - we're waiting for anything to arrive on paper so far:

• his recently much expanded employer has recently announced that they are going to divide the current private ltd company divisions into separate smaller ltd companies
• that he can, and ideally will, stay with his current division BUT if he chooses to do so then he will essentially be resigning and being re-employed
• if he chooses the above option then he will essentially be classed as a new employee. He has worked for the firm for eight years so has earned his redundancy, paternity rights etc
• that if he refuses to do so, the possibility of staying with another division is unconfirmed......
• all the divisions - soon-to-be separate firms - will STILL be officially owned by one man under a different name. I've checked with companies house and the whole set of (supposedly officially separate) companies belongs to the same owner.......

Sorry for my ignorance, but is this legal and if so, how? My partner will essentially be doing exactly the same job for exactly the same man, but will lose all his employment rights that he's gained over the last eight years, so we're a little worried to say the least.

Many thanks for reading, lilly

[strangewayofsavin]

Re: re-employment offer - no redundancy - legal?

There are certain rules for taking over a new company, however' if you'r company is taken over by a new company you have the right to change current employment contract's. The basic choice is do you except the new contract and keep your job, or do you take redundency?
Previous terms must be considered, but if the company you previously worked for was failing, and its survival was only viable through the new company buying it, then they can offer you a new contract under their terms, or pay you off at the minimal rate (for which you should contact your union or local CAB for appropriate advise).

[mariefab]

Re: re-employment offer - no redundancy - legal?

his recently much expanded employer has recently announced that they are going to divide the current private ltd company divisions into separate smaller ltd companies

all the divisions - soon-to-be separate firms - will STILL be officially owned by one man under a different name. I've checked with companies house and the whole set of (supposedly officially separate) companies belongs to the same owner.......

So, 2 potential scenarios.
1. The name of the Company/Division that he currently works for will change, but the employer will remain the same.
2. Your partner's current role will be transfered to a 'new' Company/Division, again with the same employer.

that he can, and ideally will, stay with his current division BUT if he chooses to do so then he will essentially be resigning and being re-employed
if he chooses the above option then he will essentially be classed as a new employee. He has worked for the firm for eight years so has earned his redundancy, paternity rights etc

In either 1 or 2 he is simply, as you say, continuing to the same job for the same employer.
His 8 years continuity of service and employment rights are therefore preserved.

The only ways that I can think of to scupper this are:
If there was to be a break in service between the current situation and the proposed new scenario.
If he was dismissed.
If he voluntarily agreed to resign and then seek re-employment (which I wouldn't imagine anyone would be crazy enough to do).

that if he refuses to do so, the possibility of staying with another division is unconfirmed......

Refuses to do what?
Stay in his current role,
Actually resign,
Accept what his employer says and agree that he will effectively become a new employee when the name change/transfer occurs?

[Caspar]

Re: re-employment offer - no redundancy - legal?

Employment Law is not at all my area, but common sense would dictate that this must be a reasonably common occurance, and thus the employees must be able to transfer rights, otherwise it would have been plastered across the news at some stage which I certainly don't remember happening.

[teaboy2]

Re: re-employment offer - no redundancy - legal?

that if he refuses to do so, the possibility of staying with another division is unconfirmed......

Refuses to do what?
Stay in his current role,
Actually resign,
Accept what his employer says and agree that he will effectively become a new employee when the name change/transfer occurs?

I would have to agree with mariafab on this, as the part above is some what unclear as to its meaning. If you can answer Mariafabs questions on as above, then we should beable to shed more light on this for you.

Basically though it sounds like your partners employment is safe and will continue according to the rest of what was said, just the part above is unclear. and it does sound like the employer is saying "If he chooses not to resign and seek re-employment, then the possibility of staying with another devision is unclear".

So i must admit, i am thinking along the lines of that if the employer changes the division your partner is currently working in to a different company, that your partner would have to seek re-employment under that new company. Where if the company remained the same as the original company for that division he would not. Now if that is the case, then that would not be lawful action by the employer, as your partners current contract should simply be transferred over to the new company (Transfer of Undertakings (Protection of Employment) Regulations Known as TUPE) and their is no need for anyone to resign from any divisions.

Heres some useful information for you - Employment protection during business transfers and takeovers (TUPE) : Directgov - Employment

And please answer the questions mariafab asked as i suspect the employer maywell be trying to get away with not paying redundancy. As not a single employee needs to resign and the transfer to new company names should not effect any employee or their contract and employement status. As the contract should simply be transfered over to the new company, so when the transfer is complete your partner would still have 8 years service and eligible to all the benefits awarded as a result of 8 years service, despite the company name change.

By the way, just to add - Even though the new limited companies are owned by the same person, the person that owns the company is not your employer par se. The reason for this is down to the fact that a Limited company is in law deemed as an individual legal entity, just like i am and just like you are. So the company is a seperate entity to that of the person that owns it, in law. This makes the limited company the employer and therefore the person that owns the company is not the employer par se.

[lilly3333]

Re: re-employment offer - no redundancy - legal?

Many thanks to all who've responded,

sorry for my lack of clarity. From what we've gleaned today the situation is as follows:

• the smaller company divisions are going to be made into separate limited companies rather than being under one large ltd umbrella
• the division my partner works currently works for will become one of those ltd companies
• previously the firm has moved employees from one section of the firm to another as and when the need requires and my partner has always been happy to do whichever job was needed the most
• this time my partner has the option of moving back to a section of the firm he has worked in previously, or, staying with the one he's in now. If he returns to the previous position, then he will keep his 8 year redundancy etc, but it looks as though they will be folding that section by June 2012 as they've just lost a big contract to a rival
• if he stays with the section he's currently working with, then his job is more secure, but as the job becomes part of a brand newly-created company, albeit an already created internal division, then the firm have said that as a position in a new company he will no longer have any rights held over from the previous incarnation of the firm

Mariefab is accurate when you mentioned that essentially, the company are asking him to resign and then be re-employed. Voluntarily. And that yes he will become a new employee within a new firm but in exactly the same capacity and role as he is in currently, the only difference will be that the division he is in will have LTD added to its title!

I've read a little on TUPE, but I can follow the logic when the companies involved are referring to a firm which is being taken over by a new owner/different firm rather than an internal reshuffling of divisions and renaming them all as individual separate companies. The TUPE articles I've read so far don't seem to mention how the rules apply when essentially a large company is divided into smaller companies.

Thanks for getting this far. He's in the construction industry by the way...... where very much an prevalent attitude is "well if you don't like it, they'd be plenty of others who would be grateful for the work!"


thanks very much for reading this far, lilly

[mariefab]

Re: re-employment offer - no redundancy - legal?

Well, it's probably easiest to just do as they ask.
It'll be completely meaningless and WILL NOT affect his 8 years continuity of service because, even if he signs it in blood, he cannot sign away his statutory rights (as his employer will discover if there are any redundancies/ paternity leave/ notice period etc. issues in the future.

The only thing to watch out for is if they close business(es) for a week or so during the changeover.

I'd word the resignation letter something like this:

Date...

Dear ....

As required, I'd would like to resign from my former role in your xxx Division/Company so that I can continue in my current role in your xxx Division/Company.

(If they tell him on what date the changeover will take place, put that in too.)

Yours etc.

Make sure that you keep a copy.

[teaboy2]

Re: re-employment offer - no redundancy - legal?

I've read a little on TUPE, but I can follow the logic when the companies involved are referring to a firm which is being taken over by a new owner/different firm rather than an internal reshuffling of divisions and renaming them all as individual separate companies. The TUPE articles I've read so far don't seem to mention how the rules apply when essentially a large company is divided into smaller companies.

Lilly the fact they are setting up new limited companies to take over this departments means the new limited companies will be the new owners. As such the rules under TUPE DO APPLY, regardless.

I personally would not resign but instead have an informal chat with the owner as it maybe he is not aware of TUPE regulations where you current employment contract is simply transfered over to the new company and all your entitlements remain, including the 8 years your partner has worked their being taken into account when working out any redundancy pay, should the new company make any redundancies.

[lilly3333]

Re: re-employment offer - no redundancy - legal?

Evening all,

Well the contract has arrived, although nothing has been signed yet. The only mention of anything to do with continuous employment is as follows:

• 3.1 Your period of continuous employment begins with us on 1 November 2011
• 3.2 No employment with a previous employer counts as part of your period of continuous employment
• 3.3 In accepting your appointment it shall be deemed that you have accepted all the terms and conditions set out in this Contract
• 3.4 This Contract of Employment annuls any previous agreement whether verbal or written given to you at any one time.

If anyone has any additional thoughts I would be very grateful indeed.

Many thanks, Lilly

[teaboy2]

Re: re-employment offer - no redundancy - legal?

Illegal, You have rights under TUPE for the original employment contract to be transfered over to the new employer, where it will continue from when it was originally signed i.e. 8 years ago (think thats how long you said your partner had worked for the current company).

If they want to sign a new contract with the new company then under the employment rights act they have to pay your partner redundancy pay, holiday pay (for holidays accured but not yet taken) and any notice in lieu. Forcing him to resign his currently contract and signing this new one is constructive dismissal. As basically your partner would not resign if they were not forcing him to by trying to force him to sign the new contract and give up his rights under the old contract, and no judge in the land would allow such terms you stated above to be lawful or enforceable. In fact a judge would tear it up and make your old contract the valid contract under TUPE.

I would suggest you contact acas as they will speck to your partners current (rogue) employer on your partners behalf - see here for info on TUPE and your rights Transfer of undertakings (TUPE) - Acas

You will find acas contact number here (Best time to call is just after 9am or near to 5pm - Contact us - Acas

BASICALLY DO NOT SIGN THE NEW CONTRACT.

[Caspar]

Re: re-employment offer - no redundancy - legal?

Transfer of undertakings (TUPE) - Acas

The Transfer of Undertakings (Protection of Employment) Regulations (TUPE) protects employees' terms and conditions of employment when a business is transferred from one owner to another. Employees of the previous owner when the business changes hands automatically become employees of the new employer on the same terms and conditions. It's as if their employment contracts had originally been made with the new employer. Their continuity of service and any other rights are all preserved.

[mariefab]

Re: re-employment offer - no redundancy - legal?

Are they still saying that he needs to resign, or do they just want him to sign the new contract?

[enaid]

Re: re-employment offer - no redundancy - legal?

I would ring ACAS, employment law is a minefield tbh, you could also try your local Law Centre, they give free expert advice too.
Enaid x

[teaboy2]

Re: re-employment offer - no redundancy - legal?

Are they still saying that he needs to resign, or do they just want him to sign the new contract?

By the looks of things they are indeed asking him to resign and sign the new contract as if he were leaving one company by rsignation and starting work for another company.

Though hes not changing his place of work, its basically a new company taking other the office department where hes working, the new company also being owned by the same person that owned the old one. So by asking him to sign the new contract he is basically saying sign or i sack you (which would be unfair dismissal or constructive dismissal if forced to resign). He is also asking, that he gives up his rights to any previliges or monetary (redundancy pay he is entitled to for the last 8 years he has worked there) value of his older contract.

The law is clear, as this is a straight forward company taking over the older company, then the new company takes on the old companys employees where they employment contracts are retained and treated as though the contract was originally made between the new company and the employee. So the employees continuation of service (8 years in this case) and rights under the original contract are preserved.

This company take over, or name change more like, is basically a straight forward transfer of undertakings where all company assets (within that department, office of the old company) including employment contracts and customer contracts etc are transfered over to the new company who MUST honour such contracts in full.

[mariefab]

Re: re-employment offer - no redundancy - legal?

I agree, Teaboy.

In addition to TUPE protection; I believe that this situation would also be covered by ERA1996 s.218(6) because the new setup would be an associated employer.

http://www.legislation.gov.uk/ukpga/1996/18/section/218

http://www.legislation.gov.uk/ukpga/1996/18/section/231