Company takeover and employee rights

Prepare your employees for company takeover

The employer must inform the employees well in advance about the sale of the company. And you must tell them in time about the arrival of new colleagues. You may need to involve the works council, trade unions or Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) in the preparation. That depends on the size and situation of the acquisition. Ask for advice about this well in time from an organisation that specialises in takeovers and corporate mergers.

Taking over employees

Taking over employees during a company takeover is not a choice. You may not fire any employees. Your new employees retain all rights and obligations. This applies to both the primary and secondary terms of employment. You are not allowed to change anything in their employment contracts or in the existing collective labour agreement (CAO).

The previous owner is jointly responsible for compliance with the employment contract for 1 year.

Exceptions when taking over employees

You decide whether and which employees you take over if:

• you take over a company that has gone bankrupt
• the activities of your company have changed radically
• it concerns a share transfer

There are no exceptions for sick employees

You must also take over sick employees. Including all obligations. That means you:

• must continue to pay wages during the period of illness.
• takes over the risk of wage sanctions from the previous employer. With a wage sanction, you must continue to pay the wages for longer in the event of illness. UWV imposes a wage sanction if an employer fails to comply with its reintegration obligations under the Eligibility for Permanent Incapacity Benefit (Restrictions) Act (Wet verbetering poortwachter,in Dutch)
• become a self-insurer for the Return to Work of Partially Disabled Persons Scheme (WGA) and the Sickness Benefits Act (ZW) if the previous employer was also one. This means that you must pay the benefits and the costs of the reintegration yourself.

Include the employees in your pension scheme.

You must take over the pension scheme from the previous employer, unless:

• your company has a pension scheme. You can include new employees in this scheme.
• your company is required to participate in an industry-wide pension fund. Your new employees must also participate in this fund.
• there are agreements about the pension scheme in a collective labour agreement or another scheme.

Employees keep the entitlement to the pension that they have already accrued. If you do not have a pension scheme, you must continue the former employer’s pension scheme. Check if the former employer has paid the premiums for all accrued pension entitlements. If this is not the case, the pension provider may hold you liable for this.

Report the takeover to the Tax Administration

You must inform the Netherlands Tax Administration that you are taking over employees. To do so, complete the form Melding Loonheffingen Overdracht van activiteiten (Notification of Wage Taxes Transfer of Activities, in Dutch).

Will you become an employer for the first time as a result of the takeover? Then you must register as an employer with the Dutch Tax Administration.