The TUPE mistake we see in almost every business sale

TUPE, the Transfer of Undertakings (Protection of Employment) Regulations 2006, transfers employees automatically to a buyer on an asset purchase along with their continuity of service, accrued holiday and existing terms. On a share sale the employer does not change at all, because the company being bought is still the employer; the buyer simply owns different shares in it. Confusing the two leads buyers to ask for TUPE indemnities on deals where TUPE was never engaged, and to skip the employee liability information request on deals where it was.

We ask which structure is proposed before we look at a single contract of employment. On an asset purchase, the employee liability information has to arrive at least fourteen days before the transfer, and we chase it hard, because a seller who is slow with this list is usually a seller with something in it they would rather not send. On a share sale we look instead at the target's own employment contracts and any change-of-control clauses, which is a different exercise entirely and gets missed almost as often.