If you are converting an existing trading business into a co-operative, there are a number of important HR issues for you to consider.
Take expert advice
The legal implications of buying, transferring or acquiring any business are dependent on the specific circumstances of that transaction. It is very important that you take advice from an expert, such as a solicitor.
In some situations, the obligations of the previous employer become those of the new employer. You will need to find out whether your conversion is covered by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (commonly referred to as TUPE).
TUPE deals with the rights of employees and the obligations of the new employer upon any transfer.
If TUPE applies:
- The newly formed co-operative automatically becomes the employer of the existing trading business’s employees
- Employees’ terms and conditions are protected
- Continuous service with the previous employer transfers over to the new employer
- Your ability to dismiss transferring employees or make changes to their terms and conditions will be restricted.
If TUPE doesn't apply
Even if TUPE does not apply, you may still find that certain rights and obligations pass to you as the new employer. Again, it is essential to take advice from an expert specialised in this area.
It is important in all conversions to get information about your potential new employees and consult with them over the changes which are happening to their place of work and employment. Where TUPE applies, the outgoing employer has a duty to provide information about the employees to the new employer.
- Get the support of an expert
- Find out as much as you can about what you are buying or converting into a co-operative
- Have a clear plan as to how the new business will operate.