If you sell the business, your employed staff normally transfer to the buyer automatically, on their existing terms and with their length of service intact. This is required by the TUPE regulations, and it applies however small the business is.
TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations. When a business changes hands and the employer changes, the employees who work in it move to the new owner on the same contracts. Their pay, holiday, hours and continuous service all carry over.
Share sales are different
If your salon is a limited company and the buyer buys the shares, the company stays the employer, so nothing transfers: the staff simply carry on working for the same company under its new owner.
What you need to do
- Give the buyer accurate details of every employee, including pay, holiday owed and any disputes, at least 28 days before the transfer. This is known as employee liability information.
- Tell staff about the sale and how it affects them before it completes. Both the old and new employer have duties here.
- Do not change contracts or dismiss anyone because of the sale. A dismissal where the sale is the main reason is automatically unfair for employees with the qualifying service, normally two years.
When to tell the team
Most owners wait until a buyer is committed, then tell the team together with the buyer present. Take advice from Acas or an employment solicitor on timing, because the information and consultation duties depend on your circumstances.
Sources
- GOV.UK, Business transfers, takeovers and TUPE gov.uk
- Acas, TUPE transfers acas.org.uk