Employment Protection (Consolidation) Act 1978

94 Change of ownership of business. E+W+S

(1) The provisions of this section shall have effect where—

(a) a change occurs (whether by virtue of a sale or other disposition or by operation of law) in the ownership of a business for the purposes of which a person is employed, or of a part of such a business, and

(b) in connection with that change the person by whom the employee is employed immediately before the change occurs (in this section referred to as “the previous owner”) terminates the employee’s contract of employment, whether by notice or without notice.

(2) If, by agreement with the employee, the person who immediately after the change occurs is the owner of the business, or of the part of the business in question, as the case may be (in this section referred to as “the new owner”), renews the employee’s contract of employment (with the substitution of the new owner for the previous owner) or re-engages him under a new contract of employment, sections 84 and 90 shall have effect as if the renewal or re-engagement had been a renewal or re-engagement by the previous owner (without any substitution of the new owner for the previous owner).

(3) If the new owner offers to renew the employee’s contract of employment (with the substitution of the new owner for the previous owner) or to re-engage him under a new contract of employment, subsections (3) to (6) of section 82 shall have effect, subject to subsection (4), in relation to that offer as they would have had effect in relation to the like offer made by the previous owner.

(4) For the purposes of the operation, in accordance with subsection (3), of subsections (3) to (6) of section 82 in relation to an offer made by the new owner—

(a) the offer shall not be treated as one whereby the provisions of the contract as renewed, or of the new contract, as the case may be, would differ from the corresponding provisions of the contract as in force immediately before the dismissal by reason only that the new owner would be substituted for the previous owner as the employer, and

(b) no account shall be taken of that substitution in determining whether the refusal of the offer was unreasonable or, as the case may be, whether the employee acted reasonably in terminating the renewed, or new, employment during the trial period referred to in section 84.

(5) The preceding provisions of this section shall have effect (subject to the necessary modifications) in relation to a case where—

(a) the person by whom a business, or part of a business, is owned immediately before a change is one of the persons by whom (whether as partners, trustees or otherwise) it is owned immediately after the change, or

(b) the persons by whom a business, or part of a business, is owned immediately before a change (whether as partners, trustees or otherwise) include the person by whom, or include one or more of the persons by whom, it is owned immediately after the change,

as those provisions have effect where the previous owner and the new owner are wholly different persons.

(6) Sections 82(7) and 84(7) shall not apply in any case to which this section applies.

(7) Nothing in this section shall be construed as requiring any variation of a contract of employment by agreement between the parties to be treated as constituting a termination of the contract.

Modifications etc. (not altering text)

C1 S. 94 modified by New Towns Act 1981 (c. 64, SIF 123:3), s. 54(6)

C2 S. 94 modified (E.W.) by Housing (Consequential Provisions) Act 1985 (c. 71, SIF 61), s. 5(2), Sch. 4 para. 7(2)(a) and (S.) by Housing (Scotland) Act 1987 (c. 26, SIF 61), s. 339(1), Sch. 22 Pt. II para. 10(2)(a)

C3 S. 94(1) modified by Civil Aviation Act 1982 (c. 16, SIF 9), s. 22, Sch. 3 para. 8

C4 S. 94(3) modified by S.I. 1985/1846, reg. 5(5)

C5 S. 94(6) modified by S.I. 1983/1160, art. 3, Sch. 2 para. 4