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09. Transfer of Undertakings
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09. Transfer of Undertakings

Employees’ Rights in Case of a Transfer of Undertaking

Employee labour conditions must not be reduced or negatively impacted from a transfer of undertaking. Employers are prevented from making changes to employment terms and conditions that are detrimental to employees, whether or not the employee has previously consented to the change. Due to the concept of labour succession, the new owner of a company or business will be considered liable for all labour rights and liabilities. Brazilian Labour Courts have consolidated the concept that an acquisition of a company’s control or a transfer of relevant parts of its assets to another company – when assets represent a business unit – characterise labour succession. Once the succession is characterised, the new owner is liable before the employees for any and all labour liabilities relating to the acquired business units or companies, even those connected with the period preceding the transfer of ownership.

Requirements for Predecessor and Successor Parties

From a labour standpoint, there is no need to request any authorisation, from a union or other authority, in order to proceed with a takeover.

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