Transfer of Business – Protection of Employment

When a business or other undertaking is taken over by another person or company from the current employer, any employee in employment shall be deemed to be in employment by the ‘new’ employer. The new employer shall also take on all the rights and obligations which the employee had prior to the transfer of the undertaking.

The Transfer of Undertakings and the protection of employees in such circumstances, is regulated by the Employment and Industrial Relations Act and by the Transfer of Business (Protection of Employment) Regulations.

The latter Regulations have been amended by virtue of Legal Notice 483 of 2014, to include the following:

1. Movable property has been included in the definition of when a transfer of an undertaking is deemed to happen in terms of these Regulations, in addition to the immovable property which was already included;
2. A new provision regulating the payment of any dues (wages/ bonuses/ allowances) to the employees by the transferor (person or company transferring the undertaking) has been included;
3. The inclusion of the notion that the employees’ representative needs to be advised also when there is a partial transfer of undertaking and not only when there is a total transfer.

The above changes all seek to enhance the protection of employees provided by employment legislation and to continue to reduce the occurrence of precarious employment.

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