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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
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I am part of a large business and the department I am in

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Hi. I am part of a large business and the department I am in is about to be sold to another company. My colleagues and I will go over on a TUPE transfer. However, the deal still has not gone through and there is a chance that it will not go ahead, in which case we will presumable be made redundant. Either way, I intend to resign, as I am in a position to run my own business. I am on 3 months notice. Should I hand my notice in before the sale goes through, or after?
Hello, my name is ***** ***** it is my pleasure to assist you with your question today. Do you want to work through your notice period?
Customer: replied 2 years ago.

Hi Ben. I'd rather not work my notice period. I understand that if I object to the TUPE transfer then I'll be effectively resigning and, because the business is being transferred, I don't have to work my notice and restrictive covenants won't apply. I've held off for this long because of the possibility of the sale falling through and hence the possibility of a redundancy payout, which with 12 full years of service and me being 48 would be about 7.5k statutory. If the sale falls through and redundancy happens, would I be paid 3 months notice on top of that, assuming it is agreed that I don't have to work it? All things considered, do I only stand to gain anything if the deal fails? If it goes through before I resign, then I would hand my notice in on day one with the new guys, but it would be unfair of me I think to demand 3 months PILON.

Hello, if you were to object to the TUPE transfer then you will indeed be resigning however your employment would not terminate until the date of the transfer. So you would continue to be employed by the current employer up until that point. Only once the transfer goes through will your employment terminate but you would not be due PILON as you will not be working your notice period.
If the sale does not go through then you would remain with the current employer but as you had not submitted notice of resignation (you would have only objected to the transfer which is conditional on the transfer taking place it is not the same as a ‘normal’ resignation) you would be required to resign again if you wanted to leave. So you could find yourself in a position where you had objected to the transfer, it falls through and you still need to give them 3 months’ notice to leave. You would only be paid PILON if you were willing to work through your notice period but your employer did not want to allow that – you cannot force an employer to pay you PILON, that is at their discretion.
The same would apply if you were to not object and transfer over to the new employer – you could leave on day one but you would be required to work through your notice period. Only if the employer does not want that can they pay you PILON and let you go there and then. You cannot resign and demand to be paid PILON as if you are not willing to work your notice period they do not have to pay you for it.
So thinking about whether you need to resign before or after the deal – the outcome will really be the same but it depends on whether redundancy is going to be an option. Because if you had resigned and the deal falls through the employer could just let you finish your notice period and not make you redundant. So probably best to object to the transfer (not the same as actually resigning) and then if the transfer falls through, they may look to make you redundant.
I hope this has answered your query. Please take a second to leave a positive rating, or if you need me to clarify anything before you go - please get back to me and I will assist further as best as I can. Thank you
Customer: replied 2 years ago.

Thanks Ben. I have a letter from my current employer titled "Information regarding the potential transfer of your employment" (note the use of the word "potential").

Point 4 of the letter states "In law a refusal by you to be transferred to the new employer is the same as resignation, so no entitlement to a redundancy payment will arise if this happens". This seems to contradict what you say in your latest reply "So probably best to object to the transfer (not the same as actually resigning)". Of course, our HR lady has written the letter on the assumption that things will go through, but I've been made aware unofficially that there is quite a major sticking point, which may be a deal breaker. There is also a Q & A section in the letter, part of which says "You have the right to object to the transfer by informing either your Line Manager or your proposed new employer. You should note, however that this is likely to mean that you will be treated as if you had resigned...."

So, to clarify: if I object and the deal goes through then I don't go across and my employment ends on the date of the transfer, with no notice to be served or PILON and no restrictive covenants to be enforced. If I object and the deal fails then I may still be entitled to redundancy. If I've got this right, then I have nothing to lose by objecting to the TUPE transfer. Please confirm. Thanks again.

Objecting to the transfer is the same as resignation but only if the transfer actually happens. If it does not then there would be no resignation. So you would continue to work for the current employer as if you had not resigned. So it does amount to resignation but only on the condition that the transfer actually takes place. So your assumptions are correct – you may object and if the deal goes through then at the date of the transfer your employment terminates with immediate effect. If it does not go through then you remain an employee of the existing company and if they then want to make you redundant then they can do so but they will have to pay you redundancy.
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