Contracts signed before the business is sold cease to exist once the sale of the business is complete, but the amount time that you have worked continues (continuity), for the purpose of bonuses such as leave entitlements.
The standard conditions of a contract for the sale of business specify some responsibilities owed by the purchaser (new employer) to existing employees. The purchaser must make an offer of employment to each employee in the business which it wishes to employ- conditional on and effective from completion of the sale of the business. Upon acceptance of this employment offer, employment with the vendor (old employer) is terminated by agreement. Such provisions are in place to ensure the security of the jobs of employees is maintained despite the transfer in ownership of the business.
How can Prime Lawyers help you?
If you are unsure of your rights as an employee upon the sale of a business, or if you would like some more information on your obligations to your staff as an employer, Prime Lawyers can help you. Our employment law team pride themselves on keeping up to date with changes in the law and providing the best advice.