TUPE or not TUPE

Most people are familiar with TUPE which is a complex pan-European directive with the purpose of protecting employees' rights when the business they work in changes hands. It's general impact is to transfer staff and their liabilities from the acquired to the acquiring business. 

A common misconception is that if the transaction is a share purchase, TUPE does not apply. This may be the case for the actual acquisition, but if once the deal has been made there are any actions to merge the two businesses or integrate the acquired business then this will be a "relevant transfer" and TUPE will apply.

Buyers must therefore have considered their post-acquisition strategy carefully to make sure they are not unwittingly drifting towards a TUPE process.