Business acquisition: what happens to your staff?

In this article, we explain when CLA no. 32bis applies, what it means in practice for your company and which steps you need to take.

1. Share deal or asset deal? The difference is crucial

Not every business acquisition automatically falls under CLA no. 32bis. It depends on the legal structure of the transaction.

In a share deal, you, as the buyer, acquire ownership of the shares, but the company, and therefore the legal employer, remains the same. The existing employment contracts simply continue and CLA no. 32bis does not apply in principle. However, this does not mean that you do not run any employment law risks: as the buyer, you take over the full social liabilities, including any latent risks such as pending proceedings or contested dismissals.

In an asset deal, the economic activity itself is transferred to the buyer: clients, equipment, goodwill and, in most cases, the staff as well. As soon as there is an economic entity that retains its identity after the transfer, CLA no. 32bis applies. This is usually the case in a full business acquisition through an asset deal.

2. Automatic transfer of employment contracts

The most far-reaching consequence of CLA no. 32bis is the automatic transfer of all employment contracts at the time of the transfer. The rights and obligations of the transferor are transferred by operation of law to the transferee, employees do not need to consent and the transferee cannot refuse to take over the contracts.

As transferee, you are bound from day one by the salary, all acquired salary supplements, full seniority, the role and working arrangements, contractually agreed benefits such as a company car or hospitalisation insurance, and specific clauses such as non-compete clauses.

A particular point of attention arises when the transferor and the transferee fall under different joint committees. In that case, the applicable sectoral CLAs may conflict and the situation must be assessed on a case-by-case basis. This is one of the most complex situations in practice: always consult a specialist before definitively determining the structure of the transaction.

Record everything relating to the transfer and any practical changes in writing in an addendum to the employment contract.

3. Ban on dismissal: also after the acquisition

Both the transferor and the transferee may not dismiss employees solely because of the acquisition. This ban applies both before and after the transfer.

Dismissal remains possible for economic, technical or organisational reasons, the so-called ETO exception. Think, for example, of rationalisation after integration or the closure of an overlapping entity. However, the ETO reason must be autonomous and substantiated, separate from the acquisition itself. The burden of proof lies with the employer. Anyone who violates the ban on dismissal risks an additional compensation on top of the ordinary dismissal compensation.

4. Information and consultation obligation

Before the transfer, both the transferor and the transferee must inform and consult the employee representatives in good time. This means before signing, not afterwards. The information must at least cover the planned date of the acquisition, the reasons for it, the legal, economic and social consequences for staff, and the measures being considered.

Consultation takes place through the works council, or in its absence the Committee for Prevention and Protection at Work, then the trade union delegation and, if absent, the employees themselves. Always document this procedure in writing and keep all reports. Non-compliance can lead to civil liability and financial sanctions.

5. Action plan

The first priority is a thorough employment law due diligence review. Before signing, map out all employment contracts, including specific clauses, extralegal benefits, applicable joint committees and ongoing proceedings. In a share deal, you, as the buyer, also take over all hidden social debts.

Next, ensure clear contractual protection in the acquisition agreement. The transferor should preferably guarantee the accuracy of all staff-related information and indemnify the transferee against claims dating from before the transfer. Also specify exactly which employees are transferring, so that there can be no discussion about this afterwards.

Start the information and consultation procedure in good time and also plan open communication with the individual employees. Uncertainty creates unrest and may lead to the departure of key people — precisely at a time when continuity is crucial.

Finally: do you want to harmonise employment conditions after the acquisition? Never unilaterally reduce acquired benefits. Negotiate through a company-level CLA and develop a phased plan.

Do you have questions about the impact of a business acquisition on your staff?

The rules of CLA no. 32bis are binding, but their application requires a tailored approach. Our experts are happy to assist you with employment law due diligence, transaction structuring, the information and consultation procedure, and the harmonisation of employment conditions after the acquisition. Contact our legal experts or your regular contact person.

This article was written by Jasper Caby and Lotte De Wit.