It is critical for all parties to a sale of business transaction to understand their legal rights and obligations in relation to existing employees of the business and the financial cost of termination and/or transferring of employment.
A purchaser in a sale of business has three (3) options for dealing with each employee:
- not to offer them employment;
- to offer employment, but without recognition of their prior service (although see below certain prior services that must be recognised); or
- to offer employment with recognition of their prior service.