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The content concerns Finnish legislation.
 

Obligation to Inform in Connection with Transfer of Business

Transfer of the employer’s business refers to transfer of an enterprise or an operative part thereof to another employer if the business remains the same or similar after the transfer. In a transfer of a business, employees have the right to join the transferee as 'old employees'.

If the transfer does not have immediate personnel effects, there is no need to have changed negotiations in connection with the transfer of business. Instead, both transferor and transferee have certain obligations to inform according to the Act on Co-operation within Undertakings. The obligation to inform also involves the merger and demerger situations of the company.

The transferor and transferee shall inform the employee representatives affected by the transfer of the following:

  • time or intended time of transfer;

  • reasons for transfer;

  • legal, economic, and social consequences for the employees due to the transfer; and

  • planned measures regarding the employees.

The transferor shall provide the representatives of the personnel groups with available information in good time before completion of the transfer. The transferee shall provide the representatives of the personnel groups with information no later than a week from the completion of the transfer. The transferor may also provide the information also before the implementation of the transfer. The transferee may as a matter of fact be present at the co-operation negotiations according to the Act on Co-operation within Undertakings.

The transferee has to provide the employee representatives with an opportunity to ask further questions and to answer the questions posed. The purpose of the law is to provide the employees an opportunity to gain more information on the transfer and its possible effects.

On request of the employee representatives the employer has to present the information to the entire personnel.

If the transfer has personnel effects such as reductions, the employer must undergo proper change negotiations that are required when reducing the use of personnel [Co-Operation Negotiation Obligation in Reducing the Use of Personnel]. Neither the transferor nor the transferee may not use the transfer as such as grounds for termination.