Company buy-out: employee rights

Company buy-out: employee rights

"My company has just been taken over by another company. As my contract is open-ended, what will happen to my bonus, overtime and salary conditions with my former employer?"

Valérie, Givrins

What is commonly known as a company takeover is in fact a case of merger regulated since 2004 by the Federal Law on mergers, demergers, conversions and transfers of assets and liabilities (LFus). The general case here is that of the transfer of all assets and liabilities by one company to another, including all its debts and receivables. Creditors - who cannot oppose the disappearance of the first company - benefit from the protection of their rights to a certain extent. The employee's salary is considered a claim governed by articles 26 to 28 of the LFus, which stipulate that all creditors, including employees, may demand a guarantee. This protection will guarantee all wages until the date on which the contract would normally end, subject to the employee's opposition to the transfer of his contract.

It is important to note that the employment relationship automatically passes to the purchaser, with all the attendant rights and obligations, unless the employee refuses, in which case the contract is terminated (art. 333 CO). Otherwise, the contract concluded between the employee and the transferring company remains in force and all rights acquired since the date of engagement, such as the notice period, social benefits and bonuses, are retained.

Maintaining an employment relationship also implies a continuity of employee rights that arise or evolve over time. Bonuses are one of these entitlements, which often increase as a result of years of experience or results achieved over a given period. Although it is not already payable, it is based on the employment contract with the previous employer. Consequently, this amount may be claimed from the new company as well as from the previous one, with the latter's liability ending at the end of the termination period initially provided for. As regards overtime, this represents a debt that is already due and may be claimed from both your previous and your new employer.

However, the principle of maintaining contractual relations does not prevent the purchaser from offering you a new contract which, if you agree, will cancel and replace the previous one. If you wish your seniority to be taken into account, you must demand that it be mentioned in the new agreement, which will apply to the exclusion of all other and previous provisions.