asked Her Majesty's Government:Whether, as is alleged to have happened in the recent case of Express Digital Media, a company can avoid its contractual and statutory obligations to make redundancy payments by selling itself to another company. [HL509]
A company cannot avoid its contractual and statutory obligations to make redundancy payments to former employees by virtue of having been sold to another company. Employees' contractual and statutory entitlements are unaffected when a business is sold through a share transfer, as the identities and rights and obligations of the parties to the contract are unchanged. However, in the event of termination of employees' contracts by reason of an employer's insolvency, certain statutory entitlements may be paid from the National Insurance Fund.