MP vows to carry on fighting for TUPE private equity deals

The MP behind a controversial Bill that would boost workers’ rights during private equity buyouts has vowed to carry on fighting despite being defeated in Parliament last week.

Labour MP John Heppell told Personnel Today he would rewrite his private members’ Bill, which aimed to extend TUPE legislation to cover instances when private equity companies take over an organisation by purchasing a majority shareholding (rather than buying all company assets outright, where TUPE already applies).

Such a deal happened last summer, when private equity firm KKR took over high-street chemists Alliance Boots.

Heppell’s original Bill failed to reach its committee stage on Friday 7 March.

Where TUPE applies, it protects employee terms and conditions during the sale of a company and forces owners to consult with employees prior to transfer.

Heppell said: “I agree the Bill needs to be refined. But the industry has accepted there is a need for more transparency and consultation during private equity transfers. In the next three years, the purpose of my Bill will be realised.”

The TUC and private sector union Unite backed the Bill. Unite deputy general secretary Jack Dromey said: “UK law must not allow workers to be kept in the dark by their employers. Workers should know what a private equity bid means for their pensions, wages and jobs.”

Liz Holdsworth, director of the HR leadership school at Henley Management College, agreed that Heppell’s Bill had merit. “Private equity is an area where people keep their cards close to their chest. Through no fault of their own, employees [whose employer changes] are not entitled to the same rights to consultation as other employees.”

However, the CBI and legal experts insisted there was already legislation to protect workers’ rights during private equity transfers including individual rights written into employment contracts, the information and consultation regulations, and redundancy law.

David Beswick, employment partner at law firm Hammonds, said: “This is a misconceived Bill. It tries to prevent job insecurity, but extending TUPE to private equity share sales will not help eradicate any mischief around consultation.”

What would change if TUPE was extended?

  • Owners required to consult with employees prior to takeover on jobs, wages and pensions.
  • Changing the terms and conditions of employment would be more difficult to do.
  • HR would have to provide employee information ahead of transfer.

Source: Hammonds

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