Our article on informing employees goes deep into the communication and timing itself. Here, we go a level deeper into the formal side: exactly who do you need to inform and negotiate with, and what happens if you don't?

Who does the duty apply to?

Both you as seller (transferor) and the buyer (transferee) have a duty to inform and, where relevant, negotiate with your respective employees about the transfer. The duty generally applies to employees' representatives, if any have been elected.

Is there a shop steward? Negotiate with them

If a shop steward has been elected among the affected employees, it's generally the shop steward who must be informed and — if measures affecting employees are planned — negotiated with on the employees' behalf. The shop steward also retains their existing legal status and function after the transfer, so the role doesn't lapse just because the business changes owner.

No shop steward? Inform employees directly

If there's no shop steward — often the case in smaller businesses — the affected employees must be informed directly instead. That doesn't change the actual content of the duty (date, reason, consequences), but it becomes your responsibility as seller to ensure the information actually reaches each individual employee, rather than being able to go through a single channel.

What specifically do you need to inform about?

  • The set or planned date of the transfer.
  • The reason for the transfer.
  • The legal, economic and social consequences for employees.
  • Any planned measures affecting employees — and if there are any, you must also negotiate about them, not just inform.

When does it need to happen?

"With reasonable notice before the transfer takes place" — the law doesn't set a fixed number of days or weeks, but the bigger and more complex the business, the earlier the process should typically start, simply because there are more employees and often more levels of management and representation that need time to be informed and potentially negotiated with.

What happens if you fail to do it?

If you fail to comply with the duty to inform and negotiate, you risk a compensation claim raised by the affected employees or their organization. Beyond the purely legal risk, an overlooked or belated process also risks damaging trust among employees at exactly the point when a stable transition matters most for the business's continued operations.

Special considerations for larger businesses

If the business has multiple departments, multiple shop stewards, or is covered by several different collective agreements, the process naturally becomes more extensive — you typically need to coordinate information and negotiation across several representatives, not just a single combined announcement. Here, it often makes sense to put together a dedicated communication plan, so all relevant representatives are informed simultaneously and with the same information.

Frequently asked questions

Do I need to negotiate with each individual employee if there's no shop steward?

The duty to inform then applies directly to the affected employees. The duty to negotiate about specific measures still applies, but without a representative it can in practice be harder to carry out in a structured way — seek advice if your business is in this situation.

What if we have several shop stewards in different departments?

Then all relevant shop stewards need to be informed and involved for their respective part of the business — the bigger and more segmented the organization, the more important it is to coordinate the process across all of them.

Can we face a claim even though we thought we'd informed enough?

Yes, if the information didn't actually include the date, reason and consequences, or wasn't given with reasonable notice. If you're unsure whether your process is sufficient, it's worth having it specifically assessed before proceeding.

Read the full legal framework in our article on the Business Transfer Act, or book a no-obligation call if your business is facing a larger transfer.

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