Transfer of Business

When a business is taken over wholly or partly by a person (‘transferee’) from any employer (‘transferor’), employees that are employed by the transferor are deemed to be in the employment of transferee who takes over the business. Such new employer takes on the rights and obligations which the transferor had towards the employee.
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Novolegal has assisted both the transferor and transferee with affective a seamless transfer of business ensuring full compliance with the applicable laws and regulations.

The transferor and the transferee are obliged to inform the employees’ representatives which employees shall be affected by the transfer and the date and reasons of the transfer, the implications of the transfer for the employees, and the measures which are to be taken in relation to the employees. In the case that a collective agreement was in place at the time of the transfer, the transferee must continue to adhere to the terms and conditions agreed upon therein until the termination of the collective agreement.

The Employment and Industrial Relations Act and the Transfer of Business (Protection of Employment) Regulations S.L. 452.85 seek to safeguard employees’ rights in the event of a transfer of business, and expressly stipulates that the transfer of an undertaking does not constitute sufficient grounds for dismissal of employees. If the transfer entails a material change in working conditions which are disadvantageous for employees and result in the termination of contracts of employment, the employer is deemed to be responsible for such terminations.

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