What happens to employee(s) in the situation where a business sells one of its stores to a franchisee? Does the employee(s) of the business affected (i.e. the employee(s) who work in the store sold to the franchisee) transfer to the franchisee company?

Posted in : First Tuesday Q&A NI on 1 March 2016
Chris Fullerton
Arthur Cox NI
Issues covered:

The TUPE Regulations may apply to this situation if the relevant criteria for there being a TUPE transfer are met (namely, whether there is a transfer of an economic entity which retains its identity post-transfer). In many cases the sale of a business to a franchisee for TUPE purposes will be no different to a typical business sale to a third party. 

The 1991 EAT decision in LMC Drains Limited& Another v Waugh which was decided before the 2006 TUPE Regulations, is also of assistance. In this case, the EAT held that the grant or assignment of a franchise agreement to carry on drain cleaning business amounted to a relevant transfer for the purpose of the 1981 Tupe Regulations. We can

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Back to Q&A's This article is correct at 01/03/2016

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Chris Fullerton
Arthur Cox NI

The main content of this article was provided by Chris Fullerton. Contact telephone number is 028 9023 0007 or email Chris.Fullerton@arthurcox.com

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