At WW+KN, a Baker Tilly Company, we understand the complexities involved in business transfers, particularly regarding the implications of § 613a BGB. This provision is crucial for safeguarding employee rights during such transitions. For any inquiries, please reach out to us at info@payrollgermany.de. Below, we provide a detailed guide on § 613a BGB, explaining its applications and implications for employers and employees.
1. Overview of § 613a BGB
613a of the German Civil Code (Bürgerliches Gesetzbuch – BGB) governs the rights and obligations of employees and employers during the transfer of a business or part of a business through a legal transaction.
Key Provisions:
- Automatic Transfer of Employment Relationships (§ 613a(1) BGB): When a business or part of it is transferred to a new owner, the new employer automatically assumes all rights and obligations arising from existing employment contracts. This includes adhering to any collective agreements or works agreements in place at the time of transfer.
- Prohibition of Dismissal Due to Transfer (§ 613a(4) BGB): Employees cannot be dismissed solely because of the transfer of the business. Any termination must be justified by other valid reasons such as operational, personal, or behavioural grounds.
- Employee Notification (§ 613a(5) BGB): Both the previous and new employers must inform affected employees in writing about the transfer, including the date, reason, legal, economic, and social consequences, and any planned measures concerning the employees.
2. When § 613a BGB Applies
Typical Scenarios:
- Business Transfers: This includes the sale, merger, or acquisition of a business or part of it.
- Outsourcing: When business functions are transferred to another company.
- Restructuring: Internal reorganization that leads to the transfer of business units.
Exclusions:
- Mere Transfer of Functions: If only activities are transferred without the transfer of operating resources and personnel, § 613a BGB does not apply.
- Temporary Employment Relationships: Fixed-term employment relationships may have specific provisions and might not always be covered under § 613a BGB.
3. Payroll Implications
The transfer of employment relationships under § 613a BGB has significant payroll implications:
Payroll Considerations:
- Data Integration: Employee data from the transferring business must be accurately integrated into the payroll system of the new employer.
- Continuity of Payments: The new employer must ensure continuity in salary payments, benefits, and other compensations as per the existing contracts.
- Adjustment to Collective Agreements: If different collective agreements apply, the new employer must adjust payroll and benefits accordingly.
4. Employer and Employee Rights and Obligations
Employer Obligations:
- Notification: Properly notify employees about the transfer and its implications.
- Honouring Existing Contracts: Maintain the terms of existing employment contracts and collective agreements for at least one year post-transfer unless new agreements are negotiated.
Employee Rights:
- Right to Object: Employees have the right to object to the transfer of their employment relationship within one month of receiving the transfer notice. This objection can be submitted to either the previous or new employer.
- Protection from Dismissal: Employees are protected from dismissal solely due to the business transfer. Other valid reasons for termination remain unaffected.
5. Professional Support and Legal Guidance
Navigating the complexities of § 613a BGB during a business transfer requires careful legal and payroll management. WW+KN can act as your Single Point of Contact, handling payroll integration and ensuring compliance. Additionally, through our affiliation with Baker Tilly, we have access to labor law attorneys who can manage the legal aspects of the transfer.
Consultation Services:
- Expert Payroll Management: WW+KN specializes in payroll management during business transfers, ensuring a smooth transition.
- Legal Expertise: Baker Tilly provides comprehensive legal support, including labor law advice to ensure compliance with § 613a BGB.
- Contact Information: For personalized support, please contact us at info@payrollgermany.de.
By understanding and adhering to the provisions of § 613a BGB, employers can ensure a seamless transition during business transfers, maintaining employee rights and compliance with legal requirements.