Overview

This bill extends the Transfer of Undertakings (Protection of Employment) Regulations 2006 to cover situations where private equity companies acquire or dispose of substantial shareholdings in a company. This aims to protect employees' rights during such transactions.

Description

Equity Transfers

The bill defines an "equity transfer" as the acquisition or disposal of a substantial shareholding (defined as an interest giving control of the company) in a company by a private equity firm. This applies regardless of the location of the transaction.

Employee Rights

The bill ensures that existing regulations protecting individual employment rights (e.g., preventing unfair dismissal and contract variations) and collective employment rights (e.g., protecting collective agreements and union recognition) during business transfers also apply to equity transfers.

Information and Consultation

The bill mandates that employers, transferors, and transferees must inform and consult with employees before an equity transfer, providing detailed information about the proposed transaction and its potential impact on employees. This includes providing reasonable assistance and time for employees to assess the proposed changes. Failure to do so is legally actionable.

Failure to Comply

The bill establishes legal recourse for employees if there is non-compliance with information and consultation requirements. It provides for court action to enforce compliance and prevent equity transfers until compliance is achieved.

General Provisions

The bill includes general provisions about contracting out restrictions and allows for the Secretary of State to make supplementary regulations.

Government Spending

The bill does not directly specify government spending. However, there may be some associated costs related to enforcement and potential legal challenges.

Groups Affected

Employees: The bill primarily aims to protect employees' rights during private equity transactions, ensuring continuity of employment and consultation.

Private Equity Companies: The bill imposes additional legal obligations on private equity firms during acquisitions and disposals, requiring them to actively participate in employee information and consultation processes.

Employers: Employers are subject to enhanced obligations regarding employee information and consultation in equity transfer situations, making them responsible alongside private equity firms.

Trade Unions: The bill strengthens the role of trade unions in representing employee interests during equity transfers, granting unions enhanced legal standing in ensuring compliance with consultation requirements.

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