What are our rights when our company is taken over?

If a business is transferred from one owner to another, your terms and conditions of employment are automatically transferred as well. The position with regards to pensions is more complex.

Your rights derive from legislation called the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The effect is as if your contract of employment had been agreed with the new owner at the start of your original employment. Not only are your terms and conditions of employment transferred but all the liabilities of the previous employer are also transferred. There is an exception for pension rights.

If you were entitled to join, or were a member of, your previous employer's occupational pension scheme, under rules brought in by the Pensions Act 2004, the new employer must offer you the opportunity to participate in an occupational or stakeholder pension scheme. You can find advice on the effect of TUPE on pensions on the website of the Pensions Advisory Service.

TUPE only applies where the identity of your employer changes. In general it does not apply where the owner of the shares in your employer changes but the identity of your employer stays the same.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

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