I work for a company that has gone into receivership. There are rumours that the Receiver intends to sell part of the business to raise funds. What will happen to my job if that part of the business I am working for is sold? How can I find out more information about the transfer?

If there is a transfer or sale of an undertaking or business from one employer to another, then the European Communities (Protection of Employees on Transfer of Undertakings) Regulations, 2003 (“the TUPE Regulations”) may apply. These Regulations will apply to business sales by receivers also. There must be a transfer of an economic activity as a going concern to a new employer. Basically, any employees who are wholly or mainly connected to the business being transferred at the date of transfer must transfer with the business to the new employer. Not only must the employees be transferred, but their contracts of employment are protected. The relevant employees will retain their accrued years of service and existing terms and conditions of employment.

If a transfer of undertaking takes place which falls under the TUPE Regulations, then fortunately those Regulations provide that both your original and new employer must inform you or your representative of:

  • The date or proposed date of the transfer;
  • The reasons for the transfer;
  • The legal implications of the transfer for the employees and a summary of any relevant economic and social implications of the transfer for them; and
  • Any measures envisaged in relation to the employees.

The above information must be given to you by your existing employer, where reasonably practicable, not later than 30 days before the transfer is carried out and in any event, in good time before the transfer is carried out. Your new employer will also have a similar obligation in terms of giving you information about your conditions of work and employment. These obligations to inform and consult must be complied with. In the event of a breach of the TUPE Regulations in this regard, you could bring a claim to the Rights Commissioner and a maximum of 4 weeks remuneration could be awarded.

It should give you peace of mind to know that a transfer of an undertaking or business does not constitute grounds for dismissal. However, if your current employer has a genuine need to make changes in the work force and effect redundancies, for example, due to economic, technical or organisational reasons then such dismissals can be justified and will not breach the TUPE Regulations. There must be clear factual grounds for dismissing in these circumstances so that it amounts to a legitimate dismissal.

You cannot be forced to work for the new employer if you do not want to. However, in a decision of the High Court in 2009 (Symantec Limited v Leddy & Lyons), it was held that an employee who refuses to transfer to the new employer is not entitled to redundancy and the refusal to transfer is, in fact, a resignation. This is important to bear in mind as you will not be entitled to a redundancy package if you refuse to transfer in circumstances where your terms and conditions of employment are guaranteed with a new employer. Instead, you will be deemed to have resigned.

If part of your employer’s business is being transferred to a new employer, then both employers are bound to inform you or your representative about the proposed transfer. At that point, you will be in a position to have a meaningful consultation with your employers about the implications of the transfer for you.

-Caitríona Healy