Issues with transfer of staff during M&A transactions

By Zhang Qilong and Wu Jing, East & Concord Partners
0
2074

Merger and acquisition (M&A) transactions involve not only the transfer of assets, equity and debts, but also issues with the transfer of staff. Here there are two major concerns: how working hours are counted in the original working unit; and how economic compensations are paid. In this article, the authors briefly analyze these two concerns under different M&A transaction scenarios.

Transformations in labour relations

章启龙 Zhang Qilong 天达共和律师事务所 合伙人 Partner East & Concord Partners
章启龙
Zhang Qilong
天达共和律师事务所
合伙人
Partner
East & Concord Partners

First, we need to understand how contracted labour relations are transformed under different kinds of M&A transactions. M&A transactions entail acquisitions as well as mergers, which are categorized into two areas:

  1. Merger by absorption. This refers to the situation when two or more companies merge, and one of the merging companies takes over the other companies and continues to exist and operate. The contracted labour relationships for employees of the absorbing company do not have any material changes as their employer continues to exist. For employees of the absorbed companies, contracted labour relations will be subject to change as their employing unit changes, even though the work location, nature of work, salary and compensations may not have any material changes.
  2. Merger by amalgamation. This refers to when two or more companies are merged in a way that both lose their identities and a new separate entity is founded. For employees under each of the merging companies, contracted labour relations will change according to the changes made to their employing entities.

You must be a subscribersubscribersubscribersubscriber to read this content, please subscribesubscribesubscribesubscribe today.

你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章,欢迎成为我们的订阅会员成为我们的订阅会员

East_&_Concord_Logo

北京市朝阳区东三环北路8号

亮马河大厦写字楼1座20层

邮编:100004

20/F Landmark Building Tower 1

8 East 3rd Ring Road North, Chaoyang District

Beijing 100004 China

电话 Tel: +86 10 6590 6639

传真 Fax: +86 10 6590 6639-9

电子信箱 E-mail:

zhangqilong@east-concord.com

jing_wu@east-concord.com

www.east-concord.com