Employment Issues In the Transmission of Businesses: Avoiding the Pitfalls

By Andrew Stewart

Commercial lawyers often provide advice in relation to the sale and purchase of a business, mergers, outsourcing of functions, incorporation of previously unincorporated businesses, or the privatisation of government enterprise.

In each case their will be a transmission of "business" from one legal entity to another. Important questions arise as to the effect on those employed in the business:

· Is it intended that some or all employees will be transferred with the business?

· If it is, what happens if some do not consent to the transfer? Or object to not being transferred?

· For those employees who are transferred, what is the effect of the transfer on their existing rights and entitlements? And, for those who are not, how does the law require they be treated?

· How are the costs involved in complying with relevant legal obligations to be allocated between the parties?

This article provides some basic guidance on these questions, and highlights two recent cases: Amcor and Gribbles.

(LexisNexis Butterworths Employment Law Bulletin. vol. 9, no. 6)