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extend
the application of the Transfer of Undertakings (Protection of
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Employment) Regulations 2006
to the acquisition and disposal of substantial
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shareholdings by private equity
companies; and for connected purposes.
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Be
it enacted by the Queen’s most Excellent Majesty,
by and with the advice and
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consent of the Lords Spiritual
and Temporal, and Commons, in this present
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Parliament assembled, and
by the authority of the same, as follows:—
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(1)
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For the purposes of this Act,
there is an “equity transfer” if an employer is a
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body corporate and a substantial
shareholding in the employer is disposed of,
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transferred or acquired by
a private equity company.
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(2)
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There is an equity transfer
even though the disposal, transfer or acquisition of
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the interest, or of any part
of it, is governed or effected by the law of a country
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or territory outside Great
Britain.
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(3)
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An equity transfer may be effected
by a series of two or more transactions.
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“2006 Regulations”
means the Transfer of Undertakings (Protection of
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Employment) Regulations 2006
(S.I. 2006/246);
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“private equity company”
has such meaning as may be prescribed by the
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Secretary of State in regulations
made by statutory instrument;
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“relevant transfer”
means a transfer to which the 2006 Regulations apply;
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“substantial shareholding”
means an interest in shares such that an
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undertaking holding it would,
in relation to the employer, be a
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controlling undertaking within
the meaning of regulation 3 of the
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Transnational Information and
Consultation of Employees Regulations
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“transferee”
(except where the reference is to a transferee within the
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meaning of the 2006 Regulations)
means any person, or group of
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persons acting in concert,
who acquire a substantial shareholding in the
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employer as a result of an
equity transfer; and
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“transferor” (except where the reference is to a transferor
within the
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meaning of the 2006 Regulations)
means any person who has, or group
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of persons who together have,
a substantial shareholding in the
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employer immediately before
an equity transfer.
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2
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Individual
employment rights where transfer takes place
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5
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(1)
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Paragraphs (4) and (5) of
regulation 4 of the 2006 Regulations (which in the case
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of a transfer avoid certain
purported variations of a contract of employment)
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apply in relation to an equity
transfer (with the references to the transfer of a
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contract of employment pursuant
to paragraph (1) omitted) as they apply in
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relation to a relevant transfer.
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(2)
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Regulation 7 of the 2006 Regulations
(which in the case of a transfer makes
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certain dismissals of employees
automatically unfair) applies in relation to an
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equity transfer (with references
to an employee of the transferee or transferor
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read as references to an employee
of the employer) as it applies in relation to a
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(3)
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Where an equity transfer takes
place, regulation 9 of the 2006 Regulations
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(which permits certain variations
to a contract of employment where there are
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insolvency proceedings) applies
to an employee of an employer subject to
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relevant insolvency proceedings
as it applies, where a relevant transfer takes
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place, to an employee of a
transferor subject to such proceedings.
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3
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Effect
of transfer on collective employment rights
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(1)
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Where an equity transfer takes
place, paragraphs (4) and (5) of regulation 4 of
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the 2006 Regulations apply,
with the necessary modifications, to a collective
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agreement made by or on behalf
of the employer with a trade union recognised
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by the employer as they apply,
where a relevant transfer takes place, to a
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(2)
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Where before an equity transfer
an independent trade union is recognised to
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any extent by the employer,
those paragraphs apply, with the necessary
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modifications, to any purported
termination or alteration on that recognition
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(including any purported variation,
termination or rescission of any agreement
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for recognition) as they apply,
where a relevant transfer takes place, to a
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purported variation of a contract
of employment.
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4
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Information
and consultation before transfer
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(1)
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Regulation 13 of the 2006
Regulations (which requires certain information and
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consultation in relation to
a transfer) applies to an equity transfer as it applies
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to a relevant transfer, with
the following modifications.
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(2)
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References to employees of
the transferor or transferee are to be read as
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references to employees of
the employer.
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(a)
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after “representatives
of any affected employees,” insert “and for the
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steps required by this regulation
to be completed before a transferor or
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transferee decides, or a transferor
and transferor agree, that an equity
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transfer should take place,”;
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(b)
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for “the employer shall
inform” substitute “the transferor and
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transferee shall each secure
that the employer informs”;
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(c)
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in
sub-paragraph (a), after “transfer is” insert “proposed”;
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(d)
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for sub-paragraph (c), substitute—
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“(c)
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the measures which the
transferor and transferee
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each
envisages either of them or the employer
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will,
in connection with the transfer, take in
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relation
to any affected employees or, if any of
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them
envisages that no measures will be so
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(e)
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for sub-paragraph (d), substitute—
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“(d)
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the measures, in connection
with the transfer,
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which
the transferor envisages the transferee or
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employer
will take in relation to any affected
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employees
or, if he envisages that no measures
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will
be so taken, that fact; and”;
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(f)
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after sub-paragraph (d), insert—
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“(e)
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all relevant facts and
matters (actual and
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anticipated)
in relation to the period beginning
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with
the date the information is provided and
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ending
5 years after the date of the proposed
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transfer,
concerning the structure, economic and
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financial
situation of the transferor, transferee
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and
employer, the probable development of the
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employer’s
business and of production and
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sales,
the situation and probable trend of
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employment,
investments and substantial
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changes
concerning organisation, introduction
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of
new working methods or production
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processes,
transfers of production, mergers, cut-
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backs
or closures of undertakings,
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establishments
or important parts thereof, and
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collective
redundancies.”
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(4)
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In paragraph (4), after “(2)”
omit “(d)”.
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(5)
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After paragraph (4) insert—
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“(4A)
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The requirement under paragraph
(2) to inform shall be treated as
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including
requirements to—
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(a)
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give those informed (“the
consultees”) such reasonable
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assistance
and training as they may request for the purpose of
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enabling
them to deal with and respond to the information
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(b)
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give the consultees sufficient
time, information and facilities to
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enable
them to arrange for an expert study of the implications
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of
the proposal as regards the matters set out in paragraph 2(e);
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(c)
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give the consultees sufficient
time and facilities to prepare, in
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addition
to any other representations they wish to make, a
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formal
opinion on the proposed transfer (which may be
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accompanied
by an expert study as mentioned in paragraph
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(d)
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where such an opinion is provided,
give the consultees a
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reasoned
response to any such opinion and to any expert study
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accompanying
it, and give them a sufficient opportunity for a
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subsequent
exchange of views about the proposed transfer;
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(e)
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take
the steps required by paragraph (2) with due regard for the
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parties’
reciprocal rights and obligations, and with a view to
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reaching
agreement with the consultees as to whether or not the
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proposed
transfer should proceed and if so on what terms.”
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(6)
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In paragraph (6), for “who
envisages that he will” substitute “, or a transferee,
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who envisages that the employer
or transferee will”.
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(7)
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In paragraph (7), after “employer”
insert “or transferee”.
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(8)
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In paragraph (8), for “employer
shall” substitute “employer, transferor and
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(9)
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In paragraphs (9) to (12)
each reference to “employer” is to be read as including
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the transferor and the transferee.
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(10)
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The requirements of regulation
13 as applied by this section also apply (with
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the necessary modifications),
as they apply to an equity transfer, to any
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(a)
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an employer or transferee proposes,
following an equity transfer, for a
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reason connected with the transfer,
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(b)
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concerns any of the matters
referred to in regulation 13(2)(e) (as
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inserted by subsection (3)(f)),
and
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(c)
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may affect employees of the
employer.
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(11)
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Regulation 14 of the 2006
Regulations (election of employee representatives)
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applies in relation to regulation
13(3) as applied by this section.
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5
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Failure
to inform or consult
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(1)
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Regulations 15 (remedies for
failure to comply with a requirement of
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regulation 13 or 14) and 16
(provision supplemental to regulation 15) apply,
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with the necessary modifications,
to a failure by an employer, transferor or
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transferee to comply with a
requirement of regulation 13 as applied by this Act
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to an equity transfer, as if
the failure were a failure of an employer to comply
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with a requirement of that
regulation.
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(a)
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an affected employee, within
the meaning of regulation 13 of the 2006
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Regulations as applied by this
Act, has representatives for the purposes
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of that regulation as so applied,
or is a member of an independent trade
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(b)
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in relation to that employee
it appears to any such representative, or to
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the union, that an employer,
transferor or transferee has failed to
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comply with a requirement of
regulation 13 as so applied, or that a
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transferor or transferee proposes
to proceed with an equity transfer
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before the requirements of that
regulation have been complied with,
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the
representative or union may make an application to the High Court
(in
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Scotland, the Court of Session).
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(3)
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On an application under subsection
(2), the court shall make such order,
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against such of the employer,
the transferor or the transferee, as it thinks just
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and appropriate for the purpose
of securing compliance with the requirements
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of regulation 13 as applied
by this Act and for securing that no equity transfer
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takes place until those requirements
have been complied with.
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(1)
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Regulations 18 and 19 of the
2006 Regulations (restrictions on contracting out,
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and amendment to the Employment
Rights Act 1996 (c. 18)) apply to the
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provisions of the 2006 Regulations
as applied by this Act.
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(2)
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The Secretary of State may
by regulations make such supplemental,
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consequential, transitional
or saving provision as he considers necessary for
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the purpose of giving effect
to this Act, including provision to take account of
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any amendment, or revocation
and re-enactment, of the 2006 Regulations.
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(3)
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Regulations under subsection
(2) shall be made by statutory instrument and
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shall be subject to annulment
by resolution of either House of Parliament.
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10
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7
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Short
title, commencement and extent
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(1)
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This Act may be cited as the
Private Equity (Transfer of Undertakings and
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Protection of Employment) Act
2008.
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(2)
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This Act comes into force
at the end of the period on one month beginning with
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the day on which it is passed.
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15
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(3)
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This Act extends to Northern
Ireland to the same extent as the 2006
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