EXPERTS fear that struggling businesses in Bolton stand little chance of being saved because of complex employment law which is putting off potential buyers.
Jonathan Kay, director of corporate recovery agents and auctioneers Robson Kay, claims that inflexibility in regulations can act against a company in trouble.
Transfer of Undertakings (Protection of Employment) (TUPE) law ensures that employees receive a fair deal and are not cast aside in the event of a company merger or acquisition.
But Mr Kay said the regulations cause huge problems when the assets of a business in administration are put up for sale.
He said: "Many could potentially be saved but prospective purchasers often only want to buy something that they can quickly streamline and make profitable.
"In situations like this, businesses that could have been acquired, resulting in a percentage of jobs being saved, are wound up and everyone in the company is made redundant."
Mr Kay cited a recent example in Bolton in which prospective buyers of a struggling factory would have had to pay compensation to any former member of staff that was not taken on.
The prospective buyer withdrew, the company ceased trading and all jobs were lost.
Mr Kay said: "We have worked on many sales which have progressed to a point close to completion, only for the purchaser to pull out because they are scared off by TUPE regulations.
"We would never advocate job losses. But the regulations provide no flexibility and do not take into consideration occasions when limited redundancies could save a multitude of different positions.
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