Company purchase in Germany and duty of the employers to inform

The employers involved in a transfer of a company are required under art. 613a (5) BGB (German Civil Code) to inform the employees about the transfer of business. None or incorrect information may have consequences for the exercise of a right of objection by the employees and may lead to claims for damages. Both the previous and the new owner of the enterprise or the division are required to inform the employees affected by the transfer of the business. The obligation to provide information applies regardless of the size of the company. Therefore, business sellers and acquirers should agree on the manner in which they fulfill their joint obligation. In the case of incorrect or omitted information, the employees concerned may choose to assert their rights either against the seller or the acquirer. If there is a works council, it too must be informed. However, informing the works council alone is not sufficient.

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Essential information content:

1. presentation of the transferee of the company;
   
2. a precise description of the company transference circumstances;
   
3. date and time of the transfer of business;
   
4. reason for the transfer of business;
   
5. legal, economic and social consequences of the transfer of business for the employee.
   

The information must be provided in a language understandable to the layman. The legal consequences must be presented accurately and must not contain any legal errors. For example, a summons address of the transferee must be specified. If the acquiring company has not yet been established, it must be communicated. The bodies of the transferee (for example, the managing director of a GmbH) must also be specified in detail. Already in the case of incorrect announcing of the first name of a managing director, the German Federal Labor Court calls into doubt the proper information. In various judgments, the German Federal Labor Court explains in detail what the information should contain.

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