In previous entry I said that acquisition of an enterprise will result in take-over of employees. It is time then to take a closer look at it. Basic regulations on that topic are found in the Polish Labour Code.
Section 23(1) of the Labour Code states that in case of transfer of a workplace or its part to another entity, that entity becomes a party to the employment relationships as a new employer. The rules of Labour Code apply not only in the event of acquisition but also in case of privatization, exchange or lease. In this article however, I refer only to acquisition for the sake of clarity.
Take-over of employees essentially means that the new employer becomes a party to the employment contracts without any need to conclude annexes or making any other changes in the contracts. It also means that the employment regulations and employees? entitlements do pass on to the new employer. For these reasons it is good idea to check the employment regulations in force in the vendor?s workplace as well as whether he has granted any special rights to the employees.
In certain cases stipulations of section 23(1) of the Labour Code apply even when an entity transfers only its functions or duties. The take-over of employees occurs by virtue of law, therefore it is not possible to evade it by contract between vendor and acquirer. If a company transfers just a part of a workplace it shall be liable jointly and severally together with the new owner for any obligations arisen from the employment relationships. The important thing to remember is that it concerns only relationships that existed before the transfer had occurred. The previous owner will not be liable for any legal relationships, that came to existence after the date of transfer. In case of acquisition of the whole workplace only the new owner will be liable.
Both the vendor and the acquirer are obliged to inform in writing trade unions that exist in their workplace about the planned transaction. Such information must contain the date of the transfer, legal and economical reasons and social effects for their employees. The information must be provided at least 30 days before planned transaction. In case when there are no trade unions the employers have to inform directly the employees. When only a part of a plant is transferred the vendor must inform only those employees who work at that part. Lack of the informing the employees by the vendor has no effect on the transfer.
The Labour Code grants employees the right to terminate the employment contract within 2 month period since the date of transfer. It might seem that it is superfluous regulation. Yet, such termination is considered by law as a termination made by the employer, i.e. has the same legal consequences. Among them there is the right of an employee to a dismissal pay, to which in certain circumstances the employee might be entitled to.
Last but not least issue associated with the interception is the matter of collective bargain concluded between former employer and trade unions. Such collective bargain binds the new employer for one year counting from the transfer. Nonetheless after one year the new employer must comply with all rights and conditions of taken-over employees, that arise from the collective bargain. It is necessary because when the collective bargain expires its conditions become part of each new employee employment contract.
