ACCA · Question 49 · Corporate and Business Law
SCENARIO 2: CodeStream Innovations, a tech startup, is acquired by a larger competitor, MegaTech PLC. The business is transferred as a going concern. MegaTech immediately tells CodeStream's developers that their salaries will be cut by 15% to match MegaTech's pay scales.
Under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), what is the legal effect of MegaTech's action?
Answer options:
The salary cut is valid because MegaTech is the new legal employer.
The salary cut is valid if MegaTech gives 30 days' notice.
The salary cut is void; TUPE protects the employees' existing contractual terms upon transfer.
The employees must resign and reapply for their jobs at the new salary.
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