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Ouderwetse bibliotheek

Employment transfer

What applies when a new employer takes over a business?

Employment transfer means that a new employer takes over the business. The transition can take place by the previous employer transferring all or part of their business to a new employer, ie. there is a change of employer. In order for it to be a matter of a transfer of operations, it is also required that a transfer has taken place in the form of an agreement. The business that is transferred must also constitute an economic unit and the economic unit must have retained its identity.

When assessing whether there has been a transfer of operations, one must also look at whether assets have been transferred, the number of employees taken over, whether they are the same customers and which operations are conducted and the like.

The employee's right to retain his employment

The Swedish Employment Protection Act protects the employee's right to retain his or her employment upon transfer of business. Section 6 b of the act states that the employment contract from the previous employer is automatically transferred to the new employer. This means that both rights and obligations that the employer has as a result of the employment contract are transferred to the new employer.

The employer must give each employee the opportunity to decline the offer of transfer before joining the acquirer. It is the employee himself who chooses whether he or she wants to join the new business. According to section 7 of the act an employer may not terminate an employee who is directly linked to a business being transferred to a new employer. A transfer of an activity does not constitute legal grounds for dismissal, but situations may still arise where the employer still chooses to terminate an employee in connection with a transfer of business.

The protection and the terms of employment

The employee's employment and terms of employment are transferred automatically and unchanged upon the transfer of business. The person who transfers his business is responsible for paying out earned salary and other benefits of a financial nature towards the employees. This may be holiday pay and holiday pay before the time of the transition.

Collective agreement at transition

In the event of a transfer of operations, there is also an automatic transfer of all collective agreement provisions if the new employer is not bound by a collective agreement in accordance with section 28 of the Co-determination Act. If, on the other hand, the acquirer is already bound by a collective agreement, this has priority. However, when an employee's employment contract and employment relationship have been transferred to a new employer, the new employer is obliged to apply the terms of employment in the collective agreement that then applied to the previous employer, so-called the one-year rule.


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