What rights do you have in the event of a business transfer?
You will retain your salary and working conditions when your business gets a new owner. You can also opt out of transfer and have strong protection against termination. Here is an overview of your rights.
Many NITO members experience uncertainty when their company will be sold, merged or reorganised. The Working Environment Act regulates such situations and provides you as an employee with extensive protection.
What is a transfer of business?
A transfer of an enterprise means that an enterprise or parts of the enterprise are transferred to a new employer, for example by:
- Sale of the company
- Mergers between companies
- Demerger (division of company)
- Outsourcing of departments
In order for the rules of the Working Environment Act to apply, it must be an independent entity that retains its identity after the transfer.
This means, for example, that the department that is being transferred will continue with its tasks, employees and structure under a new owner. It is not enough that just equipment or assets change hands.
If only the enterprise's shares are sold, it is not considered a transfer of business.
Your rights are automatically transferred to a new employer
The main rule is that the employees must be guaranteed the pay and working conditions that they have at the time of the transfer, cf. Section 16-2 (lovdata.no) of the Working Environment Act .
The rights are automatically transferred to the new employer. Employees retain their pay and working conditions, including pension rights and collective agreements – unless the new employer opts out of the collective agreement within three weeks.
The new employer may nevertheless choose to offer the transferred employees the pension scheme that applies in the acquiring enterprise. Nor does the new enterprise need to continue an AFP scheme.
It is not permitted to provide poorer working conditions or dismiss employees solely because of the transfer of business.
The employer's duty to provide information and discussion
Both the former and the new employer are responsible for informing and discussing with the employee representatives as early as possible matters related to the transfer.
The information must contain
- the reason for and time of the transfer
- the legal, economic and social consequences of the transfer for the employees
- any changes to collective agreements
Union representatives have the right to be heard before the decision is made, and measures and consequences for the employees must be discussed. Information must then be provided to the employees.
Can you opt out of transfers?
Employees can opt out of being transferred to a new employer. The deadline for opting out must be set at least 14 days after information about the transfer has been received. Reservations must be reported in writing to the previous employer.
The consequence of opting out is that the employment relationship ends at the time of the transfer.
If only parts of an enterprise are transferred, it may be possible to enter into an agreement that an employee will not be transferred to a new employer.
In exceptional cases, employees who will have their working conditions significantly reduced may also have a right to vote and remain in the remaining part. For example, this may apply to employees who plan to take out AFP early retirement pension soon, and who will lose the right to AFP early retirement pension if they move to a new business.
Preferential right to new employment
Employees who opt out may have a preferential right to new employment with their previous employer for up to one year, provided that they are qualified for the position.
Protection against dismissal in the event of a transfer of an undertaking
The transfer of an undertaking will not in itself be a factual reason for dismissal from either the previous or the new employer.
If the new employer needs fewer employees after the transfer, the normal rules for dismissal must be followed. The selection must be made according to objective criteria and between all employees of the new employer, not just among the employees who were transferred.
NITO is here when it matters
Many people do not know where to start when uncertainty arises in working life. As a trade union, we are here to give you security, support and concrete advice – when you need it most.
