Overview

This bill extends the Transfer of Undertakings (Protection of Employment) Regulations 2006 to cover situations where private equity firms buy or sell substantial stakes in companies. This aims to safeguard employees' rights during such transactions.

Description

The bill modifies the 2006 Regulations to include "equity transfers," defined as the acquisition or disposal of a substantial shareholding (meaning enough shares to constitute control) in a company by a private equity firm. This extension applies regardless of where the transaction is legally governed. The bill ensures employees retain their employment rights, including protection against unfair dismissal and the right to consultation before significant changes resulting from the share transfer. Key protections incorporated include:

• Protection against unfair dismissal: Employees are protected from dismissal related to the equity transfer.
• Information and consultation rights: Employees are entitled to information and consultation on the equity transfer and its consequences. This includes information on the financial and economic situation of the involved parties and potential future changes to the business.
• Collective agreement protection: Existing collective agreements with recognised trade unions are protected from adverse changes due to the equity transfer.
• Legal remedies: The bill provides legal recourse for employees if these requirements are not met. Courts can order compliance and prevent the transfer from proceeding until requirements are met.

Government Spending

The bill doesn't directly specify government spending increases. However, enforcing and implementing the extended regulations might involve additional costs for government agencies responsible for overseeing compliance. No figures are provided in the bill text.

Groups Affected

• Employees of companies involved in equity transfers: These individuals will benefit from increased protection of their employment rights during private equity transactions.
• Private equity firms: These firms will face additional obligations regarding employee information, consultation, and compliance.
• Companies with substantial shareholdings: These companies will experience heightened responsibilities in managing employee relations during equity transactions.
• Trade Unions: Trade unions representing employees in companies affected will play a more significant role in the consultation and negotiation processes.
• Government agencies: Agencies responsible for enforcing employment law may require additional resources to handle increased oversight and potential legal challenges.

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