Employees’ Rights in Case of a Transfer of Undertaking
In connection with the sale of a business or transfer of undertaking, the FLL generally requires the acquiring entity to retain the selling entity’s workers, as well as to assume existing benefit liabilities, regardless of whether the benefits are privately sponsored (e.g., company-sponsored medical insurance) or legally mandated (e.g., paid vacation and vacation premium). This is known as a substitution of employer.
Requirements for Predecessor and Successor Parties
in order to consummate the transfer of workers through an employer substitution and properly allocate responsibility for labour liabilities associated with the asset sale transaction, both the seller and the buyer are required to comply with important procedural formalities and a host of administrative tasks.