Stand: September 2015

Transfer of business checklist

This information is provided free of charge. No warranty or liability is assumed for the contents contained therein, neither for completeness nor correctness. This is not a substitute for individual counselling.

The most important cases in transfers of business

  • Purchase of a company or part of a company (asset deal)
  • Contribution
  • Merger
  • Merging and Constructing Conversion
  • Split

Prerequisites for a transfer of business

  • Transfer of an economic unit
    • Continuation of the same or similar business activity
    • Takeover of tangible and/or intangible operating assets
    • Takeover of the “core workforce”
    • Takeover of the customer base
  • Time point: the decisive point is the transfer of the actual power of disposal

Effects of the transfer of business on employment relationships

  • Automatic transfer of the employment relationship
  • Persons covered by the transfer of business
    • Employee as defined by AVRAG
    • When providing work services in personal and economic
      dependence, therefore also
      • managerial employees
      • GmbH managing directors (who work as employees)
      • Temporary workers upon sale of the leasing company
      • Apprentices
      • possibly interns (but not volunteers)
  • Employer’s dismissal due to transfer of business is void
  • Preventing the automatic transition
    • by way of retention agreement
    • Objection to the transfer of the employment relationship
      • The employee may object to the transfer of his/her employment relationship if the transferee does not take over the collective agreement protection or a company pension commitment. A legally effective objection has the effect that the employment relationship with the transferor remains unchanged.
  • Extraordinary right of termination of the employee
    • If the working conditions of an employee deteriorate significantly, the employee has the right to terminate the employment relationship. The employee is entitled to the same claims as he would have if the employer had dismissed him.

Information and consultation rights

  • In companies with a works council:
    • Information of the works council
    • Consultation with the works council at its request
    • Sanctions in case of violation of the works council’s rights to information and consultation
      • Action for performance by works council possible, but no right to injunctive relief
    • Confidentiality obligation of the works council
  • In companies without a works council:
    • Employees’ rights to information (esp. under section 3a AVRAG)

Effects of the transfer of business on

  • the collective agreement
  • Company agreements in the event of changes in company organisation
  • Company pension commitments
    • Individual contractual pension commitment
    • Company pensions based on company agreements
    • Pension commitment based on collective agreement

Liability of seller and buyer

  • Old debts/new debts
  • Special case: severance pay and company pension
  • Any more favourable liability standards (e.g. § 67 para 4 ASVG)