Employment Relationships in Business

In company acquisitions, personnel are almost always transferred. As a general rule, it is important for a new business operator to have enough competent personnel at his disposal to continue the business. However, there is almost always a question that the buyer has an obligation to take on all employees belonging to the business. The buyer cannot therefore choose the personnel who will accompany the business. In the EU transfer of business directive and also in the national employment contract law, the transfer of business is defined, i.e. The circumstances in which the transfer is considered a transfer of business under labor law.

In this case, the employees belonging to the business subject to the transfer have the right and obligation to transfer to the service of the new employer. In addition, a wide range of other obligations arise especially for the transferal, i.e. The buyer.

The definition handover of business has become established in jurisprudence, encompassing several different elements. Without going into the definition of the transfer of a business in more detail, it is worth stating here that whenever the business to be transferred is a functional entity and the operation continues without interruption, it is worth considering whether it is a transfer of business under employment law. The situation can arise in addition to a share or business transaction in those situations where operations are outsourced or outsourced operations are started to be carried out in-house.

Obligations transferred to the buyer

When there is a transfer of a business in a business transaction or other arrangement of business activities, the transferal, i.e. The buyer, has responsibilities and risks related to the transaction.

In the transfer of the store, the rights and obligations arising from the employment relationships in force at the time of transfer, as well as the related employment benefits, are transferred to the new owner of the store as such. In addition, the transferal and the transferal are jointly and severally responsible for the employee’s wage or other employment claim due before the transfer. However, the transferal is responsible to the transferal for the employee’s claim due before the transfer, unless otherwise agreed.

In practice, it is almost always agreed between the buyer and the seller in a business transaction that the transferal is responsible for the employees’ employment claims, such as vacation pay debts, wages, overtime compensation and the like for the period before the transfer, and the buyer after the transfer.