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Employees will want to know what is going to happen to them if their current boss decides to sell the existing business they work for.
How will the sale of the business impact their benefits and their daily tasks? The person who takes over the business might want to implement many changes, and they might not want to retain all the staff members within the business. This isn’t always the case, as some investors look to keep the company running the way it has been running all along.
So what should the new owner and their previous owner do?
Keep the Sale of the Business Private Until Everything has Been Agreed
If the company’s employees find out about the sale of the business before the deal has been agreed upon, it can negatively impact the workplace and damage the sale of the business.
Some workers who have been employed by the company for several years might not like the idea of change, and they might feel like their job is on the line. This is why it is of vital importance that the sale of the company is kept on the low down. If a potential buyer notices that productivity has been affected by the ongoing meetings about the sale of the business, they might want to pull out of the deal.
Leaving hard-working employees in the dark might seem like a bad idea, but it is the best thing an employer can do. It won’t harm productivity or encourage people to quit. When all the paperwork has been finalized, a meeting should be organized to inform the current staff members about the sale of the business. If they find out about the sale, they might be tempted to work in one of the business’s competitors or end employment with the business.
Business owners are obligated to provide notice about the sale and finalize payments. For more information on handling the sale of an already existing company, visit www.marcphillips.com.au/business-sales-gold-coast.
Communicate with Employees
Although it might be a stressful time for the person who is selling a business they have worked so hard to establish, it can be a stressful time for employees too.
Once everything has been agreed upon, it is important that you explain clearly to each of your workers about where they stand. Whose jobs are safe, and who might be let go? By providing each staff member with a notice about the changes made to the company, the new owners will be able to take the company forward.
By communicating with each staff member, you will be giving them the respect they deserve. The sale of the company can have a major impact on their lives, so give them some of your valuable time to sort out any issues they might have.
What the New Employer will Need
If the new owner plans to keep on some staff members, or they are being transferred to their company, the new employer will need the following:
- Up to date records about each employee
- Contractual, legal, and financial information
- Benefits
- What each staff member does on a daily basis
By providing new employers with as much information as possible, the sale of the business should go smoothly. If they decide to let some workers go, they will have to provide them with notice of ending employment. If they decide to keep them on, each employee will have to sign a new contract with their new boss.
Finalize Payments
Don’t assume that the new owners are obligated to pay your employees for outstanding payments when they take control. You are responsible to make payments to your workers when you decide to sell your business. These payments include:
- Termination payments
- Tax payments
- Entitlement payments
During negotiations, the previous owner and the new owner should discuss entitlements. For example, who is going to have to pay any outstanding wages or accrued leave? Some employees might be entitled to redundancy payments too. Consider employing an experienced broker to help you through the negotiating process.
What can Employees Expect from their New Owners?
Employees can expect new employers to let redundant workers go. However, employees should try to remain positive because most entrepreneurs will sit down with the current staff members and discuss responsibilities. This gives employees the opportunity to show their value and that the company needs them to grow.
This is a time for employees to prove the company needs them, and it also gives them an opportunity to review employment agreements. Some workers might be offered a pay rise and other incentives to stay with the company. If you have a contract with your previous boss, these agreements may also apply after the sale has been agreed upon. If the employee hasn’t signed a legally binding contract, the new owner can reduce their pay and their benefits.
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