If your employer sells its business (or part of it)
you may have gained protection from dismissal or detriment pursuant to
the Transfer of Undertaking (Protection of Employment) Regulations 2006.
You may also have a right to be informed and consulted about what’s going on.
Has your employer contracted out your work or job?
If your employer contracts out your work, your employment may
automatically transfer to the business that takes over that work. For
example, say you work as a cleaner for a solicitor’s office. You are
employed by the firm of solicitors based at the office. The Firm of
solicitors decide to contract out the cleaning of its offices to an
It is likely on the transfer of the work your employment would
automatically transfer to the outside contractor, on the same terms and
conditions of employment. If the contractor tried to change your terms
and conditions you may have a good claim in the Employment Tribunal.
So what happens if that outside contractor then loses the contract to
another contracting company? Well, depending on whether you still clean
the same offices, your employment may transfer again, this time to the
new outside contracting company. In fact your employment could even
transfer back to your original employer (i.e. the firm of solicitors) if
it decided it had had enough with outside contractors and wanted to
bring the work in-house again.
At each transfer you would have protection in relation to your
employment terms and start date. You would also be entitled to be
consulted (see below).
The Importance of Consultation
Many employers forget (or don’t know) that it has an obligation to
consult all employees affected by the transfer of a business.
To continue with the example set out above. The firm of solicitors
would be required to consult you. However, it may also have an
obligation to consult its Office Manager who may be affected by the
The outside contractor may also have obligations to consult its
existing employee if they are affected. For example the outside
contractor may decide that following the transfer (and you joining the
company) it is overstaffed such that it intends to make one of its
The obligations on your employer to consult are quite technical and
complicated. Many employers end up not consulting at all or failing to
properly consult in accordance with the law.
A failure to properly consult could mean you become entitled to an
award of 13 weeks pay. If you or your colleagues believe you may not
have been informed and consulted by your employer (properly or at all)
we would be happy to speak to you on a confidential basis. We may even
be able to bring a group claim (acting for you and all the affected
employees) on a no-win no fee basis.