When a business transfer takes place, one of the biggest concerns for both employees and owners is what will happen to employment contracts and working conditions. If you are wondering "what happens to employees in a business transfer" or want to better understand how the process affects employees in a company transfer, this article will answer all your questions.

Basic concepts: What does a business transfer involve?

Definition and types of business transfers

A business transfer occurs when ownership or operation of a business is transferred to another owner. This may include physical assets, lease agreements, and, of course, the workforce. There are different types of transfers, such as full sales, partial assignments, or internal changes within the same company.

Applicable labor regulations in Spain

In Spain, employee rights are protected under the Workers' Statute and European Directive 2001/23/EC. These regulations ensure that in the event of a business transfer, employees retain their contracts, seniority, and working conditions.

Employee rights in a company transfer

Job continuity: What happens to contracts?

When a transfer occurs, the employees of the business maintain their employment contracts, including original conditions such as salary, working hours, and contract type. This means there is no need to sign a new contract, as the employment relationship is automatically transferred to the new owner.

Protection against dismissals in a change of ownership

A change of ownership cannot be used as an excuse to dismiss employees. If the new owner decides to reduce staff, they must justify it with objective reasons, such as economic or production-related causes, and follow the established legal procedures.

Working conditions: Can they be modified?

In principle, the new employer cannot modify the working conditions established in the contract or collective agreement. Any changes must be negotiated with employees or their legal representatives.

Obligations of the new employer towards workers

Recognition of seniority and previous benefits

The new owner is required to respect each employee’s seniority as well as accumulated benefits, such as vacation days, bonuses, or severance pay.

Communication and transparency during the process

It is essential for the new employer to inform employees about the transfer clearly and well in advance. This communication should include details about business continuity and any potential changes that may affect workers.

The role of the former owner in the transfer

Shared responsibilities between the former and new employer

The former owner remains responsible for any outstanding labor debts up to the moment of transfer, such as unpaid wages or Social Security contributions. These responsibilities are typically negotiated in the transfer agreement.

Pending settlements and how they affect employees

If there are outstanding settlements, such as overdue salary payments or severance compensations, the former owner must settle them before transferring ownership, unless otherwise agreed with the new owner.

Frequently asked questions about employees in a company transfer

What happens if an employee does not want to continue with the new owner?

An employee has the right to decide not to continue with the new employer, but this is considered a voluntary resignation and therefore does not entitle them to severance pay.

Are there exceptions to job continuity?

Yes, there are exceptional cases where employees do not continue with the new owner, such as when the business closes or if the transfer does not include the entire economic activity (for example, only specific assets are transferred and not the full business unit).

Tips for employees during a change of ownership

How to prepare for a business transfer

If you are an employee and learn that your company is undergoing a transfer, the best approach is to stay calm and inform yourself about your rights. Speak with your legal representatives or union to understand the details and possible implications.

Legal resources and support for affected workers

In case of conflict, employees can turn to labor mediation services or even file a claim in court. Having the support of lawyers specialized in labor law can be a great advantage.

Key aspects to consider in a business transfer

A business transfer should not be a source of uncertainty for employees. Spanish regulations ensure the continuity of contracts and the protection of labor rights. Both the former and the new owner have important responsibilities to ensure a smooth transition. For employees, being well-informed and having the right support is essential to facing these changes with confidence and peace of mind.