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What Happens To Your Employees When You Sell Your Business?

Selling your small business has probably been an emotional experience and what will happen to your staff has probably been in the back of your mind for a time now. Many small businesses run to very tight margins and as such the issue of staff remaining, their fit in your buyer’s new plan and their remuneration is key.

Generally speaking, most business sales will involve using the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) which will protect employees when the business is sold.

TUPE acts in the following ways:

  1. the employees’ jobs usually transfer over to the new company
  2. their employment terms and conditions also transfer; therefore
  3. continuity of employment is maintained.

What If The Buyer Doesn’t Need All Your Staff?

The simplest route for an agreeable solution is to use a settlement/compromise agreement. These are effectively redundancy packages which employers can offer employees, making them aware of their statutory rights under TUPE regulations.

Beyond this, it becomes much more difficult to remove unwanted staff and the company may be liable for unfair dismissal claims. Depending on the timing, it could be the buyer or seller who is responsible for this.

We would recommend getting legal advice in the earliest instance to avoid action such as this diminishing the value of the commercial transaction.

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Meet the team

Kerry Houston-Kypta

Partner and Head of Commercial Property

Charlotte Lilley

Associate Solicitor

Catherine Snook

Trainee Solicitor

Emma Dugdale


Stacey Rutter

Legal Secretary