Selling a business can be a very complicated process when it comes to managing your obligations under New Zealand Employment Law.
It’s easy to get caught up in all things business but you need to know the details of the employees of the business you are taking over too; and let them know what’s happening. This can mean balancing your commercial risk against letting employees know what is happening, as they may speak to others, so really tricky if you want to keep everything confidential.
Make sure you know the details of all the employees of the business. Check visas, employee status, contracts, and everything you can get your hands on just in case something is noted incorrectly.
Does the business employ anyone on an Employment Working Visa (EWV)? As a new company you may not be able to become accredited in time to keep those employee/s on, and that could be a problem.
Are there any vulnerable employees such as cleaners or food preparers? If so, they will automatically be transferred unless they don’t want to be, and then they will be made redundant, and you’ll need to go through that process with them.
The entire process can be a bit like a restructuring for your employees and the business will need to go through a consultation process with each individual employee. It is important that all the correct processes are followed. You’ll need to review each employment contract and look at the individual clauses and favourable terms. Yes, all contracts have them! Then, you’ll need to get new employment agreements drawn up to reflect what has been discussed and agreed.
An employee can raise a personal grievance, even after the business is sold so be warned.
Employment offers are always open to negotiation though and there is nothing to say the new offer has to be the same as the current one, so it’s all about negotiating.