The most important facts in brief:
- The seller and the acquirer must inform the affected employees in the event of a transfer of business.
- In particular, the notification must set out the effects of the transfer of business for the respective employees.
- Incorrect notification has the consequence that the objection period for employees does not start to run.
What is the notification in the event of a transfer of business?
Employers must inform employees about the transfer of business and the consequences of the transfer of business. The transfer of business has significant consequences for affected employees. In particular, affected employees change employer unless they object to the transfer. The following aspects are important for information in the context of a transfer of business:
- GoalThe aim of the information is to fully inform employees about the transfer of business. The information is intended to enable employees to make an informed decision as to whether or not they object to the transfer of the employment relationship.
- DeadlineProper notification triggers the objection period. Employees have one month to object to the transfer of employment. The one-month period begins with the proper notification. If no proper notification is given, the objection period does not begin to run, so that employees can object to the transfer even years later, provided that there is no forfeiture.
What is the content of the information?
The information on the transfer of business is intended to provide employees with the essential information on the transfer of business and the consequences of the transfer of business. To this end, it is not sufficient to merely repeat the wording of the law. Rather, it is necessary to describe the legal, economic and social consequences of the transfer of business in addition to the time and reason for the transfer.
Exactly what information is required has not yet been clarified. The notification should contain the following information:
- Business detailsThe notification must contain the basic company details, e.g. the company name, registered office, legal representatives, the object of the transfer and the date.
- ReasonThe reason for the transfer of the business must be stated, for example a purchase agreement, lease agreement, etc. In addition, such business reasons must be stated which have an impact on the job in the event of an objection. If, for example, there is a threat of dismissal for operational reasons in the event of an objection, the notification must contain the relevant information.
- Legal, economic and social consequencesThe information must set out the legal, economic and social consequences of the transfer of the business. The legal consequences include, for example, explaining the transfer of the employment relationship, but also the situation under termination law. The economic and social consequences include, for example, the effects of collective agreements and the special features of social plans.
How is the information provided?
The notification of the transfer of business must be made in text form. For this purpose, it must be possible to identify the person making the declaration. In the case of legal entities, the natural person making the declaration (e.g. the managing director) must also be identifiable. The following aspects must also be considered with regard to the notification:
- StorableThe declaration must be made in such a way that it can be stored and retained. It is sufficient if the notification is made by e-mail.
- UniformIt is common for standard letters to be drafted and sent uniformly to all affected employees. However, it is important in this respect that the letters contain the specific features of the employment relationship.
- ResponsibleBoth the buyer and the seller are jointly responsible for providing information. It is sufficient if either the purchaser or the seller informs the employees. In practice, it is common for the purchaser and seller to coordinate their actions.
What are the consequences of the notification of the transfer of business?
Informing employees about the transfer of business triggers the objection period. Employees have one month after being duly informed, Contradiction against the transfer of the employment relationship. If employees object to the transfer, the employment relationship will continue with the previous employer. However, this often results in dismissal for operational reasons, as the job no longer exists. Incorrect notification does not trigger the objection period. Accordingly, employees who have been informed incorrectly or not at all can still declare their objection even after a long period of time. Incorrect information only does not trigger the objection period if the errors are relevant to the employee's decision-making process. You can find out more about this topic in this article on objections to the transfer of undertakings.
What is a transfer of business?
A transfer of business occurs when a business or part of a business is taken over and the acquirer continues the business. A transfer of operations occurs This is the case when business assets are taken over by an acquirer as part of an asset deal. In principle, only the individual assets are acquired in an asset deal. However, the transfer of business means that the employment relationships of all affected employees are also transferred to the acquirer. The transfer of business results from Section 613a BGB. The consequence of the transfer of business is that the acquirer assumes all rights and obligations arising from the employment relationship with the employees who belong to the business that the acquirer has taken over.