Transfer of Employees - TUPE

Kenya has not enacted legislation to regulate the seamless transfer of employees from one company to another following the merger or acquisition of their employer by another entity.

There is currently no law obliging the acquirer of a business to retain any existing employees or honour any employment terms agreed between the acquired company and its employees. The fate of employees is consequently determined by the contractual terms agreed between the two companies.

Employees must contend with one of two options when their employer is bought out:

• agree to be employed afresh by the acquirer on the terms determined by the acquirer; or
• accept a redundancy package from their employer and become unemployed.

However, the Kenya Law Reform Commission (KLRC) and the State Department for Labour have reviewed the Employment Act 2007 and have come up with a draft Employment (Amendment) Bill, 2019, if passed by parliament the law could address among other things the status of employees in mergers and acquisition.

What businesses can do

The main aim of transfer of employees is to ensure that a business transfer does not unfairly disadvantage transferred workers, by preserving continuity of employment. This means that workers employed by the previous employer (the “transferor”) automatically become employees of the new employer (the “transferee”) on the same terms and conditions when the transfer takes effect (except for certain occupational pension rights).

Employment law can be a complex area, and it is essential that you understand the legal implications of Employee Transfer and how this may affect your staff. If you are planning on transferring all or any part of your business to a new employer, it is important to seek expert advice on how to navigate the rules carefully.

At Hassan Luk, Our team of specialist lawyers are experienced in dealing with all aspects of Employee transfer transactions and can provide comprehensive advice on the legal implications of a transfer, practical options available to you and likely outcomes. We have substantial expertise in drafting documentation for the consultation process and will help you to ensure that it is carried out in line with all regulations.

Whether you are a large-scale organisation or an independent business owner, if you are planning a transfer, our team will guide you through the whole process and work with you to achieve a swift outcome that is beneficial for all.

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