1) Fire everybody
2) Create new corporate entity
3) Rehire the meek and compliant
4) Sell corporate entity back to original company
Judges tend to get very cranky when they have to deal with shenanigans like these.
The question really should just be in #1 is legal. The extra shenanigans doesn't change that question.
#1 by itself is not illegal. When companies move a factory overseas they also just fire everybody. Not nice, but not illegal.
It's not illegal in se, but it is illegal if it's done in order to retaliate against employees for organizing, in order to target union employees, in order to undermine a union, etc.
There's a question of enforcement, and there's the challenge of proving that to the requisite legal standard. But assuming the facts are established, it's actually a very clear violation of the NLRA.
They were told if they didn't sign a worse deal they would be fired, causing a fight with the union.
The new company has to offer employees a "transfer of previous employment" - so even though you're working for someone else, your history at the previous company is moved over with you. So if they wanted to get rid of you, they would then have to go through a redundancy process - which involves explaining why they're letting you go, offering you alternatives and giving you a payout based on your length of service.
I think how it gets prosecuted also depends on if there is a way to prove collusion between the two companies in this. It is absolutely fishy that Epic laid everyone off just before the sale/transfer concluded to Songtradr and both companies can currently pretend they did nothing wrong and hurting the union was an accident of bad timing and Songtradr especially looking "clean" hiring back in "waves" based on BS metrics and "goodwill" since it could have just not offered jobs back to people already laid off by the previous owner. It can be hard not to imagine that there wasn't some "golf course handshake" on the whole thing, but proving that existed may be tough to do, especially if the collusion was literal golf course handshakes with no paper trail.
This should be illegal but it just sounds like good free market business.
If they were Epic, not Bandcamp, employees then Songtradr would be within their rights to proceed as they have. But Epic would have had to go through a redundancy process (including explaining why it's happening, detailing the alternative tactics they have explored and trying to find other roles within the organisation for the affected employees).
Of course, it's all immaterial as UK law doesn't apply (and I only took a short qualification in it so I know it's fiendishly complex anyway).
EDITED to remove information I had included in the original post
Seems like the way the sale was set up, it was deliberately done to avoid any commitments to the Bandcamp workforce. No idea of the legality of this, but if I was a Bandcamp employee that was lucky enough to move to SongTradr, I'd be polishing my resume, because it doesn't bode well for them being a good employer.