The Transfer of Undertakings for the Protection of Employment - TUPE - protects employees and their employment when they transfer between businesses.
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When businesses are trading normally, employees are thought of as being protected. But what of employees belonging to an employer that is in administration?
The recent case of AE Olds v Late Editions has helped settle the matter in that it was decided that TUPE applies to firms and employees in administration.
The consequences are vast for the purchasers of firms that are insolvent. They now need to consider the liability of the staff that will effectively transfer over as well as prepare for claims from staff dismissed by the administrator.
Of course the law is a minefield so those acquiring assets of insolvent businesses should seek good advice for their circumstances.