Employees’ Rights in Case of a Transfer of Undertaking
No statute governs the employment relationship when a business transfers to new ownership. As most employees are employed “at-will,” a “new employer” is free to offer employment to the employees of the seller/transferor employer or alter the terms and conditions of employment at the employment site. If a transfer of undertaking will result in a plant closing or mass layoff, as defined under the WARN Act, employees are entitled to 60 days’ advance notice by the seller/old employer. If a union represents the employees of the seller, the new employer may be under a duty to bargain with the labour union and cannot change any terms and conditions of employment without first bargaining with the labour union.