Time to transfer?

For a charitable setting when considering the transfer of assets, you will need to have permission of the early years alliance and the Charity Commission for any assets to be given to another provider. They will ordinarily need to be a charitable organisation. On closure you will also need to close any bank accounts and transfer any monies remaining to the relevant party whether that be the new incumbent owner, to another setting or the Alliance.

In most scenarios the transfer will fall within the TUPE regulations. TUPE stands for Transfer of Undertakings (Protection of Employment) and protect employees’ rights when they transfer to a new employer.

TUPE regulations apply to both the outgoing employer and incoming employer. The staff will be protected by TUPE regulations if they’re legally classed as an employee. Both employers will need to make sure you inform and consult all employees affected by the transfer. By discussing plans with staff early on and considering their views, you’re more likely to maintain morale. You should think carefully about when the best time is to tell any affected staff and how you’ll communicate with them before, during and after the TUPE transfer.

By law, the old employer must provide the new employer with specific information about the employees transferring. This is known as ‘employee liability information’ this must be given to the new employer at least 28 days before the transfer date.
The new employer must tell the old employer about any ‘measures’ they’re thinking of taking after the transfer. These measures are usually changes to working practices. On the date of the transfer, employees will automatically transfer to the new employer and they must inform the staff in writing that there’s been a change of employer and their length of service and terms and conditions of employment are protected.

An employee’s existing pension is protected during the transfer. Their pension may transfer to the new employer depending on the type of pension they have. This is a complex area of law so it’s a good idea to get specialist pensions advice.

You need to report changes to Ofsted when someone else will be taking over as the nominated individual. The new owner may need to apply for a new registration.

It is important to also contact any suppliers and look to terminate any contracts with them. This would also include any finalising any accounts with utility companies and business rates. You will also need to notify HMRC that you will cease to be an employer.

If your setting has a lease or license for its premises, you will need to look at the notice periods laid out in any written agreement to hand back the premises or look at the transfer of the premises to the new owner in the alternative.

Alongside the transfer process you may need to dissolve the charity in accordance with the constitution, this decision may be conducted in the general meeting when deciding on the transfer.

You will also need to look at the retention periods for any records that are held – including employment records of the staff will need to transferred to the new employer. However some records such as accident records will need to be retained by the original setting, best practice is to store this on a memory stick and password protect the data to ensure that the details are stored securely