Employment issues in M&A transactions in North Macedonia

1. Check whether:

• a representative trade union exists at the target company.
• obligations exist towards employees which arose before the date of transfer (if so, the purchaser as the new employer shall be jointly and severally liable together with the previous employer regarding those obligations towards employees which arose before the date of transfer).
• the Act on the Takeover of Joint Stock Companies (Takeover Act) applies. If so, the purchaser as bidder and the management body of the target company are obliged to immediately inform the employees’ representatives/employees of the intention to takeover.

2. Prepare the following in draft form:

• information for the attention of the trade union/employees regarding:

1. the date or proposed date of the change of employer;
2. the reasons for the change of employer;
3. the legal, economic and social consequences of the change of employer for the position of employees, and
4. any measures being planned to alleviate such consequences.

3. Inform / Notify

• The present and the future employer must notify the trade union/employees of the following:

1. the date or proposed date of the change of employer;
2. the reasons for the change of employer;
3. the legal, economic and social consequences of the change of employer for the position of employees, and
4. any measures being planned to alleviate such consequences.

If the company does not have a trade union, the obligation to inform/notify refers to the employees.

• The future employer must inform the trade union representatives of their employees affected by the transfer, before they become directly affected, of the consequences for their own working and employment conditions.
• If the Takeover Act applies, the purchaser as bidder and the management body of the target company are obliged to immediately inform the employees’ representatives/employees of the existence of the intention to takeover.

4. Consult

• Prior to the transfer of rights and obligations arising out of the employment relationship, the present and future employer must consult with the trade union/employees, with the purpose of reaching an agreement on the following:

1. the date or proposed date of the change of employer;
2. the reasons for the change of employer;
3. the legal, economic and social consequences of the change of employer for the position of employees, and
4. any measures being planned to alleviate such consequences.

If the company does not have a trade union, the obligation to consult refers to the employees.

5. Implement

• With the execution of the status changes, all rights, obligations and responsibilities from the employment agreement and the employment relationship are transferred to the new employer (the purchaser).
• The purchaser undertakes to ensure the provision of all rights, responsibilities and duties of the employees who have been transferred thereto for at least one year, or up to the expiry of the employment agreement (if this is an employment agreement with a specific term which expires sooner) or the expiry of the collective agreement binding the previous employer (if the collective agreement expires before one year).
• If because of the change of employer, the rights from the employment agreement are worse due to objective reasons, and the employee terminates the employment agreement for this reason, the employee is entitled to the same rights as if the agreement was terminated for business reasons (i.e. the employee is entitled to severance pay, the amount of which shall be calculated taking into consideration the time spent working with both the previous and the new employer).

1. Check whether:

• a collective agreement exists,
• the Takeover Act applies.

2. Prepare the following in draft form:

• information for the attention of the trade union (if one does not exist, for the attention of the employees) regarding:

1. the date or proposed date of the change of employer;
2. the reasons for the change of employer;
3. the legal, economic and social consequences of the change of employer for the position of employees, and
4. any measures being planned to alleviate such consequences.

• In addition, if the Takeover Act applies, then within 5 days from publishing the takeover bid, the management body of the target company is obliged to submit to the employees’ representatives (if this doesn’t exist, to the employees) their opinion on the takeover bid, which should contain:

1. the position of the management body on the influence of the bid on the interests of the target company, and in particular the employees, as well as of the strategic plans of the bidder for the target company,
2. data on the existence/non-existence of negotiations in relation to the takeover bid between the bidder and the management body of the target company,
3. the manner in which the bidder establishes the right to vote over the shares they already own,
4. a statement as to whether any of the members of the management body who own shares to which the takeover bid refers intend to accept or reject the offer and to enclose their explanation, and
5. supported data on the last audited annual report of the target company listing the book value of the shares to which the takeover bid refers.

The employees’ representatives (or if this doesn’t exist, the employees) may give their opinion on the takeover bid within 3 working days from receiving the opinion of the management body.

If the management body of the target company receives an opinion from the employees’ representatives/ employees, it is obliged to publish it along with their own opinion.

3. Inform / Notify

• The present and future employer must notify the trade union/employees of the following:

1. the date or proposed date of the change of employer;
2. the reasons for the change of employer;
3. the legal, economic and social consequences of the change of employer for the position of employees, and
4. any measures being planned to alleviate such consequences.

If the company does not have a trade union, the obligation to inform/notify refers to the employees.

• The seller undertakes to inform the trade union representatives of their employees of the transfer in a timely manner prior to the execution of the transfer.

4. Consult

• Prior to the transfer of rights and obligations arising out of the employment relationship, the present and future employer must consult with the trade union/employees, with the purpose of reaching an agreement on the following:

1. the date or proposed date of the change of employer;
2. the reasons for the change of employer;
3. the legal, economic and social consequences of the change of employer for the position of employees, and
4. any measures being planned to alleviate such consequences.

If the company does not have a trade union, the obligation to consult refers to the employees.

• When the seller plans to implement measures in relation to their employees, they must consult the trade union representatives of their employees in relation to such measures in a timely manner in order to reach an agreement.

5. Implement

• The rights and responsibilities of the seller regarding their employees for whom the employment relationship is being terminated remain the same until the day of the transfer, unless stated otherwise under other statutory provisions.

• The obligation to inform and consult the trade union representatives of the employees includes the measures ascertained in relation to the transfer of the employees and must be executed prior to the change in working conditions.

1. Check whether:

• a representative trade union exists at the target company.
• obligations exist towards employees which arose before the date of transfer (if so, the purchaser as the new employer shall be jointly and severally liable together with the previous employer regarding those obligations towards employees which arose before the date of transfer).

2. Prepare the following in draft form:

• information for the attention of the trade union/employees regarding:

1. the date or proposed date of the change of employer;
2. the reasons for the change of employer;
3. the legal, economic and social consequences of the change of employer for the position of employees, and
4. any measures being planned to alleviate such consequences.

3. Inform / Notify

• The present and the future employer must notify the trade union/employees of the following:

1. the date or proposed date of the change of employer;
2. the reasons for the change of employer;
3. the legal, economic and social consequences of the change of employer for the position of employees, and
4. any measures being planned to alleviate such consequences.

If the company does not have a trade union, the obligation to inform/notify refers to the employees.

• The future employer must inform the trade union representatives of their employees affected by the transfer, before they become directly affected, of the consequences for their own working and employment conditions.

4. Consult

• Prior to the transfer of rights and obligations arising out of the employment relationship, the present and future employer must consult with the trade union/employees, with the purpose of reaching an agreement on the following:

1. the date or proposed date of the change of employer;
2. the reasons for the change of employer;
3. the legal, economic and social consequences of the change of employer for the position of employees, and
4. any measures being planned to alleviate such consequences.

If the company does not have a trade union, the obligation to consult refers to the employees.

5. Implement

• With the execution of the status changes, all rights, obligations and responsibilities from the employment agreement and the employment relationship are transferred to the new employer (the purchaser).
• The purchaser undertakes to ensure the provision of all rights, responsibilities and duties of the employees who have been transferred thereto for at least one year, or up to the expiry of the employment agreement (if this is an employment agreement with a specific term which expires sooner) or the expiry of the collective agreement binding the previous employer (if the collective agreement expires before one year).
• If because of the change of employer, the rights from the employment agreement are worse due to objective reasons, and the employee terminates the employment agreement for this reason, the employee is entitled to the same rights as if the agreement was terminated for business reasons (i.e. the employee is entitled to severance pay - the amount of severance pay shall be calculated taking into consideration the time spent working with both the previous and the new employer).

1. Check whether:

• a collective agreement exists.

2. Prepare the following in draft form:

• information for the attention of the trade union (if one does not exist, for the attention of the employees) regarding:

1. the date or proposed date of the change of employer;
2. the reasons for the change of employer;
3. the legal, economic and social consequences of the change of employer for the position of employees, and
4. any measures being planned to alleviate such consequences.

3. Inform / Notify

• The present and future employer must notify the trade union/employees of the following:

1. the date or proposed date of the change of employer;
2. the reasons for the change of employer;
3. the legal, economic and social consequences of the change of employer for the position of employees, and
4. any measures being planned to alleviate such consequences.

If the company does not have a trade union, the obligation to inform/notify refers to the employees.

• The seller undertakes to inform the trade union representatives of their employees of the transfer in a timely manner prior to the execution of the transfer.

4. Consult

• Prior to the transfer of rights and obligations arising out of the employment relationship, the present and future employer must consult with the trade union/employees, with the purpose of reaching an agreement on the following:

1. the date or proposed date of the change of employer;
2. the reasons for the change of employer;
3. the legal, economic and social consequences of the change of employer for the position of employees, and
4. any measures being planned to alleviate such consequences.

If the company does not have a trade union, the obligation to consult refers to the employees.

• When the seller plans to implement measures in relation to their employees, they are to consult the trade union representatives of their employees in relation to such measures in a timely manner in order to reach an agreement.

5. Implement

• The rights and responsibilities of the seller regarding their employees for whom the employment relationship is being terminated remain the same until the day of the transfer, unless stated otherwise under other statutory provisions.

• The obligation to inform and consult the trade union representatives of the employees includes the measures ascertained in relation to the transfer of the employees and must be executed prior to the change in working conditions.

The regulations described as being applicable to a share deal are also applicable to a merger. As such, a merger comes into effect when entered into the relevant public register of companies.