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Accrued holidays during TUPE process

Michaela

We are currently going through the TUPE process at the moment and I have just received notice that several employees have 27 days annual leave left to take. to make matters worse their holiday year runs January -  December so when we take over on 1st December they will have all this leave to take.

I am wondering does any of the financial responsibility for the holiday pay fall to the current employer as this amount seems excessive to have at the end of the year. 

we usually accept holidays no issue but this situation will cause many problems to us both operational and financial.

any help would be much appreciated.

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  • Great advice from Keith and Elizabeth
    It's a good illustration of "caveat emptor" or "let the buyer beware". Your due diligence has successfully identified a future cost that the vendor has not taken active steps to highlight (but they have no obligation to do so).

    For me it would be a matter of calculating the added cost and impact on your company (27 days of salary per person, plus social security, plus pension contributions, life insurance contributions etc.). This figure should then be used to negotiate the purchase price downwards. Been there. Seen it. Done It. Usually the selling company will hold up there hands and say 'you got us there' and swallow the cost reduction.

    If they don't, it implies that they may well not have been squeaky cleanin other areas and that there could well be other expensive surprises if the transfer goes ahead. More importantlyyour TUPE lead team should be formally notified of the risk, and then drive appropriate negotiations either for a price reduction or for a commitment that if certain types of costs are subsequently found, the vendor will accept a back-charge after TUPE occurs.
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  • Great advice from Keith and Elizabeth
    It's a good illustration of "caveat emptor" or "let the buyer beware". Your due diligence has successfully identified a future cost that the vendor has not taken active steps to highlight (but they have no obligation to do so).

    For me it would be a matter of calculating the added cost and impact on your company (27 days of salary per person, plus social security, plus pension contributions, life insurance contributions etc.). This figure should then be used to negotiate the purchase price downwards. Been there. Seen it. Done It. Usually the selling company will hold up there hands and say 'you got us there' and swallow the cost reduction.

    If they don't, it implies that they may well not have been squeaky cleanin other areas and that there could well be other expensive surprises if the transfer goes ahead. More importantlyyour TUPE lead team should be formally notified of the risk, and then drive appropriate negotiations either for a price reduction or for a commitment that if certain types of costs are subsequently found, the vendor will accept a back-charge after TUPE occurs.
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