If a company buys a business that recognises an independent trade union does the buyer inherit the trade union recognition agreement after the transfer?

If the TUPE Regulations apply [ When do the regulations apply?], then the purchasing company, the transferee, will stand in the shoes of the seller, the transferor, in the collective agreement [ Effect of the Regulations]. This means that the purchaser will inherit the collective agreement and will be treated as having recognised the union. However, a purchaser can de-recognise a trade union at any time as long as it gives due notice under the recognition agreement unless the trade union was granted recognition by the CAC after an application under the statutory recognition procedure. In such a case, the employer can apply to the CAC for the union to be de-recognised but it must wait three years from when statutory trade union recognition was granted [ Derecognition].

If the purchaser intends to assimilate the seller's workers into its own workforce, so that the original bargaining unit loses its identity, then the obligation to honour the recognition agreement under the TUPE Regulations does not apply. Similarly, if the union obtained recognition under the statutory trade union recognition procedure, the employer can apply to the CAC for the bargaining unit to be revised if there are significant changes to it as a consequence of the transfer of the business or, as stated above, can apply to the CAC for the union to be de-recognised.

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