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Business Sales

Submitted By Firm: CSB Advocates

Contact(s): Andrew J. Zammit, Ann Bugeja

Author(s):

Date Published: 10/8/2013

Article Type: Legal Article

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Business Sales

On a business sale (either a share sale or asset transfer) do employees automatically transfer to the buyer?

When a business or other undertaking is taken over, by another person from the current employer, any employee in employment shall be deemed to be in employment by the ‘new’ employer. The ‘new’ employer shall also take on all the rights and obligations which the employee had prior to the business sale/transfer of undertaking. By way of general information this is referred to as a transfer of the undertaking in the EIRA.

Not all business sales would constitute a transfer of undertaking; in fact the mere transfers by share take-over would not constitute a transfer of undertaking due to the fact that when a company's shares are sold to new shareholders, there is no transfer of the business, the same company continues to be the employer. The transfer of assets only and transfer of a contract to provide goods or services (where this doesn't involve the transfer of a business or part of a business) may also not be considered as a transfer of undertaking.

What employee rights transfer on a business sale? How does a business sale affect collective agreements?

All employee rights transfer upon a transfer of undertaking, the new employer shall take on all the rights and obligations which the employee had prior to the transfer of the undertaking.

Post the transfer of undertaking, the terms and conditions agreed in any collective agreement shall continue to be observed, until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement.

Are there any information and consultation rights on a business sale? How long does the process typically take and what are the sanctions for failing to inform and consult?

Should the transfer of undertakings result in measures affecting the conditions of employment of the employees, there shall be discussions between both the previous and new employer (and also the employees’ representative).

These discussions shall begin within 7 working days from the day on which the employees’ representatives have been notified of the intended transfer and such consultations shall cover the impact of the transfer on the employees’ conditions of employment. The representatives of the employees affected by the transfer, shall be informed of:  

  1. the date or proposed date of the transfer;
  2. the reasons for the transfer;
  3. the legal, economic and social implications of the transfer for the employees; and
  4. the measures envisaged in relation to the employees.

The above notice shall be made in writing and shall be delivered to the employees’ representatives at least 15 working days before the transfer is carried out or before the employees are directly affected by the transfer as regards their conditions of work and employment, whichever is the earlier. The Director responsible for Employment and Industrial Relations shall also be informed on the same day as the employee’s representatives.

The Transfer of Business (Protection of Employment) Regulations, impose a sanction of €1,164.69 in respect of any person who is in breach of the said Regulations.  Such sanction shall be in respect of every employee affected by the transfer.

Can employees be dismissed in connection with a business sale?

The transfer of an undertaking shall not in itself constitute sufficient grounds for dismissal of employees, however this is not applicable in cases where it would be necessary to dismiss a number of employees due to economic, technical or organisational reasons entailing changes in the workforce.

Are employers free to change terms and conditions of employment in connection with a business sale?

Upon a business sale/transfer of undertaking the terms and conditions of an employee should remain unchanged.  Moreover if an employee terminates his/her employment due to a substantial change in the conditions of employment as a consequence to the transfer of undertaking, the employer shall be responsible for such termination and a claim may be brought before the Industrial Tribunal.

Terms and Conditions of Employment

Employee Representation and Industrial Relations

Discrimination

Maternity and Family Leave Rights

Termination of Employment

Protecting Business Interests Following Termination

Court Practice and Procedure

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Client Successes

Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

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American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

As an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld
Partner 

Hollywood Entertainment Corporation

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Ingram Micro

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Konami Gaming

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Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

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Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

Stacy Murphy
Former Senior Director of Human Resources

Rich Products

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Jill K. Bond
Senior Vice President/General Counsel, Shared Services and Benefits

Ricoh Americas Corporation

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Assistant General Counsel

Sanmina-SCI

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Michael A. DiGregorio
General Counsel  

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