Going Concern

The Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE") apply where an undertaking (business) is sold as a going concern (as opposed to a sale of assets or a sale of shares) or where a unit within a business is contracted-out (outsourced) or where the contractor is changed. In the event of such a transfer, the employment rights (except pensions) of those employed by the seller immediately prior to the transfer are preserved and become the responsibility of the buyer. Dismissal in connection with the transfer gives the employee a right to claim unfair/wrongful dismissal against the transferee. What a "going concern" is, is a matter of fact but transfer of goodwill is usually the key criterion. Prior to the transfer, there are obligations to consult with the appropriate representatives of the employees who may be affected.