Continuity of Employment Relationships in a Corporate Reorganisation

In a change of legal form, the company generally remains the same employer, even if its legal form or name changes. In a merger or split-up, employment relationships may be assigned to the continuing or successor company. Before the effective date, a complete employee list should therefore be prepared, recording each person’s contract, role, remuneration, place of work, length of service and outstanding claims. In a split-up, it must be clearly established which business unit and employer each employee will be assigned to in future. Existing remuneration claims, leave balances and other employment-related entitlements must not be overlooked when taking over employees. The reorganisation alone does not provide a legal basis under employment law for dismissal or a unilateral change to material contractual terms. If duties, place of work, remuneration or working hours are changed, the applicable employment-law and contractual requirements must be met separately. Employees should be informed in good time of the effective date, the future employer’s name, their contacts and the practical effects on payroll and work processes. Personnel files, payroll systems and internal access rights must be updated consistently for the legal transition. Information, assignment lists and agreed contract amendments should be documented in a clear and traceable way for each employee.