For anyone buying or selling a business, important changes came into effect on 1 July 2024. The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) oblige the buyer and seller of a business to inform and consult with appropriate representatives of employees who are affected by a TUPE transfer, or measures taken in connection with it.
Micro-businesses (commonly defined as those employing fewer than ten employees) can choose to inform and consult with individuals directly. This exemption recognises it may be cumbersome to go through the process of electing representatives for a transfer involving only a handful of employees who could be spoken to directly with ease.
This micro-business exemption has been extended to larger workforces for transfers taking place on or after 1st July 2024. Specifically, the employer may now consult directly with employees where either of these apply in relation to the transferor or transferee:
- Employers with fewer than 50 employees.
- Employers of any size, involved in the transfer of fewer than 10 employees.
This relaxation of the requirements cuts out part of the administrative burden of the current process for employers, providing greater flexibility in managing the process. Conversely, there may be occasions where it will be more efficient not to take advantage of the micro-business exemption even though it is available.
