Business transfers, takeovers and TUPE
Insolvent businesses
If the employer is insolvent and the business is being transferred or taken over by another company, the protection employees get is different from in a normal transfer.
The employees are unlikely to be protected under TUPE if the business is closing down. However, TUPE regulations will normally apply if it’s being rescued and taken over or transferred.
If employees are owed money
Employees have rights if their employer is insolvent and owes them money. Employees can claim for this whether they’re protected under TUPE or not.
In a TUPE-protected transfer, the new employer must pay any amount left over after employees have been paid from the government’s National Insurance fund.
Changes to employees’ terms and conditions
Employees’ pay can be reduced or their other terms and conditions changed after the transfer. This is allowed if it will prevent job losses.
Any changes must be agreed with employee or trade union representatives.
Any agreement cannot break statutory employment rights. For example, employees cannot be paid below the National Minimum Wage.