Business transfers: What are your rights as an employee?

A merger, business transfer or ownership change of your workplace can be an uncertain situation.

However, as a rule, employees are transferred to the new owner on their existing employment terms and conditions – and these cannot be changed significantly without just cause.

On this page, you can get to grips with the rules if you are employed in a company that has a new owner.

What is a business transfer?

In a business transfer, all or parts of a business change owner.

This can happen in several ways:

• The company is sold in whole or in part to another owner
• The company merges with another company
• The company outsources part of its tasks
• A public company is privatised

As an employee, you automatically follow the company to the new owner.

If you do not want to be transferred, you have to resign from your position.

The Danish Transfer of Business Act stipulates that the new owner takes over rights and obligations towards the employees. This means that you retain your notice of termination, your salary and terms of employment and other rights – including protection against unfair dismissal.

When must you be notified of a business transfer?

There is no deadline for when you as an employee must be informed that a business transfer is taking place in the company where you are employed.

But you do have the right to be informed of the date or proposed date of the transfer, the reason for the transfer and the legal, financial and social consequences as well as intended measures for the employees in a reasonable time before the transfer.

In certain cases, however, the stock exchange's ethical rules may mean that you as an employee can only be informed about the company transfer when it is made public.

What consequences does a business transfer have on your contract and terms of employment?

In the case of a business transfer, you must be informed of the new employer's name, address, social security number and the like, which can be done in an addendum to your employment contract. You must have this information no later than 1 month after the business transfer.

The new owner can – just like the previous one – make minor changes to your terms of employment without notice.

If, on the other hand, there are significant changes or deterioration in your terms of employment, you must be notified with what corresponds to your notice of termination. You must then decide whether you want to accept the changes or consider it a termination.

Read more about changes in your terms of employment

Can you be terminated in a business transfer?

The new employer cannot dismiss you without documenting that it is due to economic, technical or organisational reasons.

If you are dismissed as part of a business transfer, you may be entitled to unfair dismissal compensation.

Contact IDA if you have been dismissed

What happens to your collective agreement in the event of a business transfer?

If you were covered by a collective agreement at your old workplace, it will be included in the transfer of business to the new employer.

The new employer has a deadline of three weeks from the actual transfer of the company to renounce the collective agreement. If the employer chooses not to renounce the collective agreement, it will automatically continue, and the new employer will become a party to it.

If the new employer renounces the collective agreement, it expires, but the terms continue to apply as the individual employee's terms of employment. You therefore retain your rights from the collective agreement.

The employer can later terminate the terms, but only from the moment when the original collective agreement was due to expire.

The employer must renounce the collective agreement to the employee organisation that has entered into it - eg IDA. The employee organisation, on the other hand, can choose not to accept it. This can lead to an industrial conflict if the employer does not want to accede to the collective agreement.