Post-acquisition workforce restructuring is common practice, whether through harmonisation of employees’ terms and conditions and/or large-scale redundancy programmes. Both have attracted trade union scrutiny, which is set to intensify with the UK Employment Rights Act 2025. This piece of legislation is fundamentally reshaping the rules of the game, and buyers who fail to take account of the incoming reforms risk greater legal and financial exposure.
From 1 January 2027, dismissing an employee for refusing to accept changes to core contractual terms known as “restricted variations” covering pay, pensions, working hours and shift patterns will be automatically unfair, as will fire and replace scenarios, where the employer hires someone else on inferior terms. A narrow exception will apply where the employer faces severe financial difficulties threatening business viability.
This does not mean that changes to terms and conditions cannot be made, but the changes will need to be done with the employee’s consent, rather than imposed unilaterally under the threat of dismissal. If post-completion integration will involve harmonising terms, e.g., reducing hours, adjusting shift patterns or restructuring pay, buyers should work with legal advisers pre-completion to map legacy terms, identify restricted variations, and develop a genuine consultation strategy. Where the cost of harmonisation is material, this should be reflected in deal pricing and built into the integration timeline...
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