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I bought a small business (sole trader) on 1st March when the…

I bought a small business...
I bought a small business (sole trader) on 1st March when the present owner retired. The basis of the buyout was machinery only i.e. no staff and the existing employee was P45'd by the previous owner and I kept the company name.
A written agreement was signed between the previous owner and myself that there were no staff liabilities with the business.
The employee did however choose to work for myself but this is not working out and I need to terminate the employment. He has also been given a final written warning due to his unreasonable behaviour.
Should I have any concerns with terminating the employment, thanks
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Answered in 4 minutes by:
10/5/2010
Jenny McKenzie
Category: UK Employment Law
Satisfied Customers: 6,428
Experience: 10 Years of experience in Employment Law and HR
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On what date did you take over the business and was the business insolvent at the time?
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Customer reply replied 7 years ago
1st March this year, the business was solvent

did you take on the goodwill and customer base of the company as well as the machinery?

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Customer reply replied 7 years ago
There was no goodwill, only machinery. There was no customer base, it is a lanndscaping business with only 1 small maintenance contract.

Did he have a break in service before coming to you?

 

Did you issue the final written warning? Why is the employment not working out now?

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Customer reply replied 7 years ago

Break in service - I don't believe so. He was offered the opportunity to work for myself (by myself) and took up the opportunity of employment.

 

Written warning - behaviour and attitude problems

So did he start with you day one you had taken over the business, how long had he worked for the previous employer?
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Customer reply replied 7 years ago
yes from day 1 and approx 10 years with the previous owner

Ok there is a risk that if you dismiss him for something that does not amount to gross misconduct that he may attempt to claim against you on the basis that he has transfered to you on a tupe transfer and he has got more than a year's service necessary to bring the claim.

 

The fact that you have a written agreement with the vendor will not change the legal position as to whether TUPE has occured, you cannot contract out of tupe.

 

On the basis of what you have said you have an argument that TUPE does NOT apply. If you have merely purchased the machinery that is not enough for it to be considered to be an 'undertaking', there must be something more such as property, business liabilities or goodwill for it to amount to an undertaking.

 

The problem is that an employment tribunal would ultimately decide and you do risk a claim from him if you go ahead and dismiss. It may be better to give him a final written warning BEFORE dismissing him and warning him that he will be dismissed if his conduct/ performance does not improve. That way if he is deemed to have continuous service under tupe you will not have unfairly dismissed him.

 

I would be grateful if you would press ACCEPT If you have found my answer useful. I will then leave the question open to answer your follow on questions for free.

Jenny McKenzie
Category: UK Employment Law
Satisfied Customers: 6,428
Experience: 10 Years of experience in Employment Law and HR
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Customer reply replied 7 years ago

Jenny, a follow up question.

The agreement I had with the previous owner was all staff liabilities must be resolved by him prior to buying the equipement. The previous owner made an additional payment to the employee on his final day. This (i took on good faith) was a termination payment. Does this strenghten my position.

thanks

I'm afraid not as I said earlier you cannot 'opt out' of tupe in this way - it either applies or it doesn't.

 

 

 

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Customer reply replied 7 years ago

Sorry Jenny, my concern is over the length of service. I understand I am bound by TUPE, my question relates to "I am responsible for the accrued service under the previous owner". This is what I was keen to avoid by making sure everything was settled by the previous owner prior to buying it. The question of the (possible)termination payment, I hoped, would strengthen my position in that I am only responsible for what happens post purchase.

 

thanks again

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