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
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
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