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To very little fanfare, it’s been announced recently that BHS has been sold by Philip Green for just one British pound. Both the seller and the buyer have been making optimistic noises about the future for the chain, while some retail experts project the end of the line for a very British institution.

The immediate news for employees seems to be that there is no news.  Generally speaking, upon sale of a business, employment obligations transfer under TUPE to the new owner.  Transferring employees enjoy protection against dismissal if the principal reason for such dismissal is a reason connected to the transfer of the business.  Any such dismissal would be automatically unfair and that may offer some short term comfort to BHS employees.

However, BHS has not been making a profit and the new owners will no doubt be looking at the possible need for rationalisation, including, for example, closure of less profitable stores.  If dismissals are then effected because of a redundancy situation, those dismissals, despite still being connected with the transfer, are likely to fall under an exception to the automatic unfair dismissal rule, known as dismissal for an “ETO” reason (economic, technical or organisational reason).  The new owner would still need to go through a fair redundancy process but would avoid liability for an automatically unfair dismissal.

So, it seems fair to say that there may be some nervous times ahead for BHS employees waiting for the dust to settle.  After all, it’s striking that another former High Street institution, Woolworths, is almost better known now for being a party in a famous case about collective redundancy consultation than it ever was for its pick’n’mix selection.

For more information about this post, contact our Employment Law Team on 0161 930 5117