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ahfen
ahfen_79@yahoo.com
24/09/2007 17:45:08
Re: Merger

Company A brought over by company B. Integration plan is to create another 2 difference companies, then all staffs in both entities will be segregated to 4 differences company according to their job scopes.

Under this circumstance, can we transfer the staffs by just issue a transfer letter? Or shall we terminate their service with company A & B then rehire them under Co. A, B, C & D?
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KL Siew
kl_siew@yahoo.com
24/09/2007 20:07:28
I think it would be better if you read Regulation 8 of the Employment(Termination and Layoff Benefits)Regulations 1980, which can be found in this website. It may give you some guidance as to what to do. In this type of situation it would better for you to consult your company lawyer who is involved in the purchase. He should be able to give the necessary legal advice.

"...8. (1) Where a change occurs (whether by virtue of a sale or other disposition or by operation of law) in the ownership of the business for the purposes of which an employee is employed or of part of such business, the employee shall not be entitled to any termination benefits payable under these Regulations, if within seven days of the change of ownership, the person by whom the business is to be taken over immediately after the change occurs, offers to continue to employ the employee under terms and conditions of employment not less favourable than those under which the employee was employed before the changed occurs and the employee unreasonably refuses the offer.

(2) If the person by whom the business is to be taken over immediately after the change occurs does not offer to continue to employ the employee in accordance with paragraph (1), the contract of service of the employee shall be deemed to have been terminated, and consequently, the person by whom the employee was employed immediately before the change in ownership occurs and the person by whom the business is taken over immediately after the change occurs shall be jointly and severally liable for the payment of all termination benefits payable under these Regulations.

(3) Where an offer by the person by whom the business is taken over immediately after the change occurs to continue to employ the employee is accepted by such employee the period of employment of the employee under the person by whom the employee was employed immediately before the change occurs, shall, for the purposes of these Regulations, be deemed to be a period of employment under the person by whom the business is takeover, and the change of employer shall not constitute a break in the continuity of the period of his employment. ...."

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ahfen
ahfen_79@yahoo.com
25/09/2007 11:37:39
What procedure shall we follow if a staff were to be transferred to sisters company (with different company registration number but is under same group of company)?

Any concern need to taking care of? (eg. leave balance, T&C)
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KL Siew
25/09/2007 12:48:44
I think it will be good to have a meeting with staff concered, make them understand the situation. The staff concerned should not lose out whether it is seniority, continuity of service and all other existing benefits such as annual leave, sick leave entitlement etc etc.

If there are problems with the staff concerned in this operation, try to get some help from either the Labour Department or the Industrial Relations Department. Bear in mind that the staff can feel uncomfortable or even suspicious of this process of transferring.
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ahfen
ahfen_79@yahoo.com
25/09/2007 13:18:03
Thanks KL.

That mean it should be ok that the co A just issue a transfer letter to the comcerned staff stated that "xxx will be tranfer to co.B effective xxx & all terms & conditions of employment will remain unchange as per appointment letter dated xxx"?

Does the co. B need to issue another letter of offer?
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KL Siew
25/09/2007 14:26:17
Company B needs to make an offer with terms and conditions not less favourable than before.
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