HR aspects in an asset deal include complex employment law issues that directly impact employee transfers, employee rights and transaction risks. In an asset deal, employment contracts automatically transfer when there is a transfer of undertaking according to Article 7:662 of the Civil Code. This requires thorough due diligence of employee files, contracts and ongoing labour disputes to manage legal and financial risks.
What is an asset deal and how is it different from a share deal?
A asset deal involves the purchase of specific business assets and resources, while a share deal involves the transfer of shares in the company. For HR aspects, this means fundamentally different legal implications for personnel transfer and employee rights.
In an asset deal, the transfer of undertaking regulations determine whether employment contracts automatically transfer. This happens when there is an economic entity that is transferred by agreement where the identity is preserved. Case law uses the Spijkers criteria for this: nature of business, transfer of assets, value of intangible assets, takeover of staff, customer base and comparability of activities.
A share deal, on the other hand, leaves the legal employer unchanged. Employment contracts continue automatically without transfer procedures. This makes share deals simpler for HR aspects, but asset deals offer more flexibility in selective personnel acquisition.
What employee rights are retained in an asset deal?
All existing labour rights automatically transfer to the new employer when transfer of undertaking applies. This includes contractual rights, accrued pension rights and fringe benefits with no possibility of unilateral change by the transferee.
Contractual rights remain fully intact: salary, holidays, bonus schemes and other arrangements cannot be adjusted without the employee's consent. Accrued rights such as holiday pay, jubilee benefits and seniority are maintained.
Pension rights require special attention. Accrued rights in the old pension fund remain, but new accrual takes place according to the acquirer's scheme. This can lead to different pension schemes for similar employees.
Collective bargaining agreements remain in force during their term, unless they expire earlier. The new employer must comply with them until a new collective agreement is agreed or the existing one expires.
How does personnel transfer in an asset deal work in practice?
Staff transfer in an asset deal proceeds automatically by legal provisions once transfer of undertaking is established. The new employer automatically becomes a party to all employment contracts without the individual consent of employees.
Practical implementation starts with identifying which employees are transferred. This depends on their direct involvement in the transferred economic unit. Employees working exclusively for non-transferred activities do not automatically transfer.
Consultation procedures with works councils are mandatory. The WOR requires timely information on proposed decisions and advisory rights on major organisational changes. This process takes at least six weeks and can affect the transaction timeline.
Information to employees must be provided in writing at least one month before the transfer. This information includes date of transfer, reason for transfer, legal consequences for employees and intended measures concerning terms and conditions of employment.
What are the key HR due diligence aspects in an asset deal?
Staff files, employment contracts and ongoing disputes form the core of HR due diligence in asset deals. Thorough analysis of these documents prevents unforeseen legal and financial liabilities after transfer.
Personnel files should be fully analysed: job descriptions, salary levels, conditions of employment and special agreements. Inconsistencies between contracts and practice can lead to employee claims.
Employment contracts require legal review for validity, competition clauses, intellectual property rights and dismissal clauses. Outdated contracts without modern provisions can pose compliance risks.
Ongoing labour disputes and potential claims should be inventoried. This includes sick leave, disciplinary proceedings, discrimination claims and dismissal procedures. These can involve significant financial liabilities.
Pension liabilities and social security require specialist analysis. Deficits in pension funds or arrears in contributions can spill over to the new employer.
What risks do HR aspects entail in asset deals?
Bringing HR aspects to asset deals legal liability risks and unforeseen costs entail that could affect the transaction value. These risks arise from automatic transfer of employment obligations and possible employee claims.
Severance payments are a significant risk when reorganisation after transfer is necessary. Dutch dismissal protection requires UWV or subdistrict court approval, which involves time and costs. Severance payments can amount to several years' salary.
Compliance issues arise due to changing laws and regulations. New AVG obligations, working conditions legislation and collective agreement provisions may require adjustments that were not foreseen.
Employee claims can arise from changes in working conditions, pension schemes or fringe benefits. Employees can claim dissolution of employment contract with entitlement to compensation.
Hidden liabilities such as jubilee payments, untaken holidays and bonus schemes can represent substantial costs that only become visible after transfer.
How do you communicate effectively with employees during an asset deal?
Transparent and timely communication according to legal information requirements prevents turmoil and legal proceedings. Effective communication combines legal obligations with change management principles for successful integration.
Legal information requirements must be strictly adhered to. Employees are entitled to written information on date of transfer, legal consequences and intended changes at least one month in advance. Works councils must be informed earlier for advisory rights.
Communication strategy should take into account different target groups: directly affected employees, non-transferred staff and managers. Each group has specific information needs and concerns.
Change management starts with clear explanations of reasons for the takeover and future prospects. Employees want certainty about job retention, working conditions and company culture.
Regular updates during the process prevent speculation and rumours. A communication calendar with set times for information provision creates structure and trust.
HR aspects in asset deals require specialist knowledge of employment law, tax implications and transaction structuring. The complexity of automatic employee transfers, due diligence requirements and communication obligations make professional guidance essential for successful transactions. For entrepreneurs considering an asset deal, it is advisable to seek early contact contact specialist advisers experienced in the legal and practical aspects of personnel transfers.
Link copied!
