You take over a company in your capacity of entrepreneur, and employees who previously were employed by the selling party, will now be employed by your company. There is a considerable risk that there will be a ‘transfer of undertaking’.

In that case, all employees will automatically transfer along to the new company. In the event of a transfer of undertaking, the purchasing party cannot choose which employees it wants to take over, and which not. In addition, the employees retain all their rights and obligations under their employment relationship. It is, therefore, in principle, not allowed to adjust terms and conditions of employment or to make other (new) arrangements.

In practice, nevertheless, it happens quite often that the purchasing party tries to agree upon new employment agreements with the employees. For the simple reason that it is more practical to harmonise the terms and conditions of employment with the existing employees in the company of the purchasing party. Still, this is not allowed. The rules are very strict, and only if it is impossible to apply a certain condition of employment, an exception may apply.

Many employees are not aware of their rights in such situations, and agree to amendments of their terms and conditions of employment. However, if they have been informed insufficiently or incorrectly by their (new) employer, they are still entitled to terms and conditions of employment that were applicable prior to the acquisition.

Such claims may be submitted even years later, and significant amounts may be involved.