The Acquired Rights Directive is the name given to Council Directive 77/187 of 14 February 1977, which aims at ‘the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of businesses’ (as amended by Directive 98/50/EC of 29 June 1998; consolidated in Directive 2001/23 of 12 March 2001).

The Directive aims to regulate transfer of an undertaking by ensuring that terms and conditions of employment are maintained for the employees affected. For collective agreements, Article 3(3) stipulates that this protection should last until ‘the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement.’ However, Member States may limit the period for observing such terms and conditions, with the proviso that it shall not be less than one year. The Directive had important implications for privatisation and contracting-out policies in some Member States. If privatisation includes the transfer of part of the state-owned firm with its workforce, this normally means that the employees transferred benefit from the protection of the Directive. The same happens when the provision of public services is contracted-out to private enterprises which undertake to employ the existing workforce.

http://www.eurofound.europa.eu/areas/industrialrelations/dictionary/definitions/acquiredrightsdirective.htm

Transfer of undertakings (TUPE)
(from ACAS http://www.acas.org.uk/index.aspx?articleid=1655)

The Transfer of Undertakings (Protection of Employment) Regulations (TUPE) protects employees’ terms and conditions of employment when a business is transferred from one owner to another. Employees of the previous owner when the business changes hands automatically become employees of the new employer on the same terms and conditions. It’s as if their employment contracts had originally been made with the new employer. Their continuity of service and any other rights are all preserved. Both old and new employers are required to inform and consult employees affected directly or indirectly by the transfer.

Which transfers are covered?

TUPE applies when an undertaking or part of it is transferred from one employer to another, eg:

* where all or part of a sole trader’s business or partnership is sold or otherwise transferred
* where a company, or part of it, is bought or acquired by another (if the second company buys or acquires the assets and then runs the business rather than acquiring the shares only)
* where two companies cease to exist and combine to form a third
* where a contract to provide goods or services is transferred in circumstances which amount to the transfer of a business or undertaking to a new employer.

TUPE can apply regardless of the size of the transferred undertaking, ie from large organisations employing thousands of employees to small businesses like a village shop with one assistant.

TUPE does not apply to:

* transfers by share take-over because, when a company’s shares are sold to new shareholders, there is no transfer of the business: the same company continues to be the employer
* transfer of assets only (eg the sale of equipment alone wouldn’t be covered but the sale of a going concern including equipment would be covered)
* transfer of a contract to provide goods or services where this doesn’t involve the transfer of a business or part of a business
* transfers of undertakings situated outside the UK.

I’m not sure that they can do this as TUPE legislation applies?