Buying a small business - Redundancy

Posted to uk.finance and uk.legal Followup-to uk.legal

Hello

I am posting this on behalf of my brother who is currently in the process of buying a fish and chip shop with 12 employees.

I have searched various on-line resources but have found them lacking the details I am looking for. So I am hoping someone here maybe able to help.

Pointers to on-line references would be superb, or any advice anyone can give would also be very much appreciated.

First of all the Transfers of Undertaking states that staff must be notified

6-8 weeks prior to the transfer taking place. Is it the case that the seller must do this? the purchaser? or both?

I have read that if a member refuses the transfer then they will have their contract terminated, and while not considered dismissed will be treated as having resigned, and therefore not be entitled to any redundancy pay. (

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74459745&r.l273859176&r.l173858805&r.s=sc&type=RESOURCES&itemId7447973 ) One member of staff thinks she is entitled to redundancy money(regardless if the current or new owner is making her redundant). Assuming he is buying the business as an ongoing concern,and has no plans to make any staff redundant, is she? (I presume the answer is no, but feel I need to check)

The member in question is the shop manageress(and employed there for 16 years) (For which she is paid an additional £20 per week). I understand she cannot be financially worse off after the transfer, but can she be kept on the higher salary and demoted, with someone else taking over the position of manageress? Or would this infringe the rules?

Is there any exceptions made for age of employer (the lady is in her fifties) or any automatic requirements or options that must be granted to them?

He has the advantage that people he knows also works there, so we have insider knowledge into the working habits of the staff. There are staff members who have not worked to the best of their ability (by a long way). these staff members are undesirable. But I would assume that they cannot be let go (assuming they have been there for longer than 1 year) without a period of monitoring their activities, and providing any relevant and compliant discipline procedures? Can anyone confirm this?

If anyone can offer any help I would be very grateful.

Reply to
Phil Deane
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Many of these questions have serious financial consequences for several parties. They should be asked to a legal professional who will stand by his/her advice. Without paying a professional fee, you will not get much better information than on businesslink.gov.uk .

Personally I would not buy a going concern business unless the price was similar to what it would cost to set up an identical business in a comparable location. Nothing to do with your question, but sure to get me shouted at ;)

Reply to
dp

i agree with dp -you need good professional advice - this is a major transaction.

some observations:-

1) Transfer of undertakings. this may not apply if he is buying a limited company. if so, the change in ownership of the shares does not affect the contracts of employment.

check the status of the concern - many small businesses have incorporated in recent years to take advantage of (rapidly disappearing) tax benefits.

for more info, try

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,
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2) rubbish staff

a) less than one year's service - sack them.

b) more than one year's service - problem.

it is bloody hard to get rid of someone with more than 12 months service.

you could:-

- go through correct disciplinary channels (tortuous and liable to backfire in the end anyway)

- make them redundant as part of a downsizing - still possible to be challenged. you must fairly select people to make redundant. it would just be coincidence that these unwanted individuals would be selected....

- give them a few hundred to go away under the terms of a compromise agreement (a legal document where they sign away their rights but you pay for independant legal advice to advise them)

good luck - you will need it

Reply to
A S****

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