Employer's position in a transfer

Under the Regulations, when an undertaking is transferred the position of the previous employer and the new employer is as follows:

• The new employer takes over the contracts of employment of all employees who were employed in the undertaking immediately before the transfer, or who would have been so employed if they had not been unfairly dismissed for a reason connected with the transfer.1 An employer cannot just pick and choose which employees to take on.
• The new employer takes over all rights and obligations arising from those contracts of employment, except criminal liabilities and rights and obligations relating to provisions about benefits for old age, invalidity or survivors in employees' occupational pension schemes.
• The new employer takes over any collective agreements made on behalf of the employees and in force immediately before the transfer (see also Trade union recognition).
• Neither the new employer nor the previous one may fairly dismiss an employee because of the transfer or a reason connected with it, unless the reason for the dismissal is an economic, technical or organisational reason entailing changes in the workforce. If there is no such reason, the dismissal will be unfair. If there is such a reason, and it is the cause or main cause of the dismissal, the dismissal will be fair provided an employment tribunal decides that the employer acted reasonably in the circumstances in treating that reason as sufficient to justify dismissal. If, in this case, there is a redundancy situation, the usual redundancy procedures will apply (see Redundancy).
• The new employer may not unless the contract of employment so provides unilaterally worsen the terms and conditions of employment of any transferred employee.
• The previous and new employers must inform and consult representatives of the employees (see Information and consultation).