Business transfers and takeovers: right to consultation
If the company you work for is going through a business transfer or takeover, both the transferring employer and new employer have a responsibility to inform and consult with employees who may be affected by the transfer.
Information and consultation
Any employee who will be affected by a business transfer or takeover has a right to be informed and consulted by their employer. This might include employees who:
- will be transferred
- will not be transferred but whose jobs might be affected
- work for the employer taking on the transferring employees and might be affected by the transfer
Your employer should tell you:
- that the transfer is going to take place, approximately when, and why
- the legal, economic and social implications of the transfer for the affected employees
- whether any measures like reorganisation will be taken and how they will affect you
If you are transferring to a new employer, your current employer should also consult with you about any action your new employer thinks they'll be taking that will affect you. The consultation must be carried out with the aim of coming to an agreement.
If your current or future employer thinks they could be taking action that will affect you, they must consult with your employee representatives to try and get your agreement to the action. They must give you the information in good time.
If any reorganisation is planned, your representative can put forward your views. Your employer must reply to these. If they reject the views then they must say why.
Informing and consulting with representatives
The information and consultation with employees normally happens through nominated employee representatives.
Trade union representatives
If you have an independent trade union recognised for collective bargaining purposes in your workplace, your employer must inform and consult an authorised official of that union. This may be a shop steward or a district union official or, if appropriate, a national or regional official. The employer is not required to inform and consult any other employee representatives, but can decide to if the trade union is recognised for one group of employees but not for another.
If you are not represented by a trade union, your employer must inform and consult other appropriate employee representatives. These may either be existing representatives or new ones specially elected.
Your employer is responsible for making sure the consultation is offered to appropriate representatives.
For example, your employer should not inform and consult a committee specially established to consider the operation of a staff canteen about a transfer affecting sales staff. However, it might be appropriate for your employer to inform and consult a fairly elected or appointed committee of employees, such as a works council, that is regularly informed or consulted more generally about the business's financial position and personnel matters.
Arrangements for elections
If the employee representatives need to be specially elected, your employer should:
- make sure as far as possible that the election is fair
- decide how many representatives need to be elected so that the interests of all the affected employees are represented (taking into account the number and level of those employees)
- decide if all the affected employees should be represented as one workforce, or groups depending on the level of employee (for example, manager, shop floor workers )
- decide how long the employee representatives will need to be in place
The following conditions should also be met:
- the candidates for employee representatives are employees affected by the business transfer or takeover on the date of the election
- no employee affected by the business transfer or takeover is unreasonably excluded from standing for election
- all employees affected by the business transfer or takeover are entitled to vote for the employee representatives
- so far as possible, voting should be done in secret
- the votes given must be accurately counted
You should be able to vote for as many candidates as your employer decided are needed to represent you. For example, if your employer has stated that there needs to be three employee representatives then you should be able to vote for three candidates.
If an employee representative leaves, or decides not to continue with the role, another election should be held to replace them.
Rights of employee representatives
Employee representatives and candidates for election have certain rights and protections which help to allow them to carry out their roles. These are essentially the same as the rights and protections of trade union members.
Access to employees
Employee representatives and candidates should have access to employees affected by the business transfer or takeover. They should also have appropriate access to accommodation and facilities (for example, use of a telephone).
What is 'appropriate' will vary according to circumstances. For example, if there is one photocopier in an office, only allowing access for one hour a day might be reasonable. However, if there are five photocopiers that no one uses, it might not be reasonable.
Unfair dismissal of an elected representative
An elected representative will be automatically unfairly dismissed if the reason, or the main reason, for their dismissal is because of their status or activities as an employee representative. An elected employee representative or candidate should also not suffer any other detriment (harm) because of their status or activities (for example, having their hours reduced).
If an Industrial Tribunal finds that a dismissal was unfair, it may order the employer to reinstate or re-engage the employee or make an appropriate award. If the Industrial Tribunal finds that a representative or a candidate for election has suffered detriment short of dismissal it may order that compensation be paid.
The right to reasonable time off
An elected representative also has a right to reasonable time off with pay during normal working hours to carry out representative duties. Representatives should still be paid their normal pay while they are away from work.
What to do if you have problems
If you cannot resolve the problem with the employer informally, you may be able to make a complaint to an Industrial Tribunal if you are an:
- employee representative and you feel the employer failed to inform and consult
- employee with 12 months' continuous service and you feel the employer has not followed the information or consultation requirements
You can decide to make a claim against your transferring employer, your new employer or both. If you bring a complaint against only one employer, the employer could decide to join the other employer in the case.
Where both employers are joined in the complaint they will split the payment of any compensation. It is up to the Industrial Tribunal to decide what proportion each one pays.