Employment issues in M&A transactions in Slovakia

1. Check whether:

• any internal regulations or collective bargaining agreements exist granting individual employees additional entitlements as a result of the transaction;
• any employment agreements exist which contain provisions granting employees special entitlements as a result of the share deal transaction;
• the terms of any relevant collective agreements or internal regulations include any information or consultation obligations relating to the transaction.

2. Prepare the following in draft form:

• an announcement of the planned transfer in accordance with section 3.1. (as there are no statutory requirements regarding this announcement, it does not have to be made in writing or contain any specific details).

3. Inform / Notify

• According to the general principles of Slovak employment law, employees or employees’ representative bodies have the right to receive information regarding the economic and financial situation of the employer and any potential developments of its activities. Consequently, the employer must provide its employees with this information (there is no sanction in the event that this obligation is breached).

4. Consult

• There is no legal obligation to consult employees over this kind of transaction, unless stated otherwise in a collective bargaining agreement or internal regulations.

5. Implement

• Not applicable, unless stated otherwise in a collective bargaining agreement or internal regulations.

1. Check whether:

• any internal regulations or collective bargaining agreements exist granting individual employees additional entitlements as a result of the transaction;
• any employment agreements exist which contain provisions granting employees special entitlements as a result of the share deal transaction;
• the terms of any relevant collective agreements or internal regulations include any information or consultation obligations in relation to the transaction.

2. Prepare the following in draft form:

• an announcement of the planned transfer in accordance with section 3.1. (no statutory requirements exist regarding this announcement, so it does not have to be made in writing or contain any specific details.)

3. Inform / Notify

• According to the general principles of Slovak employment law, employees or employees’ representative bodies have the right to receive information on the economic and financial situation of the employer and any potential developments of its activities; the employer must therefore provide employees with such information (no sanction exists in the event that this obligation is breached).

4. Consult

• No legal obligation to consult employees over this kind of transaction exists, unless stated otherwise in a collective bargaining agreement or internal regulations.

5. Implement

• Not applicable, unless stated otherwise in a collective bargaining agreement or internal regulations.

1. Check whether:

• sections 27 – 31 of the Slovak Labour Code apply to the transaction (the Acquired Rights Directive is implemented in these provisions). These sections apply to transactions in which the assets being transferred constitute an economic unit of the employer or part of the employer (if this is the case, the obligations stipulated in sections 2 – 4 must be observed).
• any internal regulations or collective bargaining agreements exist granting individual employees additional entitlements as a result of the intended transaction;
• any employment agreements exist which contain provisions granting employees special entitlements as a result of the intended asset deal transaction;
• any internal regulations or collective bargaining agreements exist specifying statutory obligations to inform and/or consult employee representative bodies (trade unions, work councils) on the intended transaction.

2. Prepare the following in draft form:

• the notification letter regarding the asset deal transaction. According to the statutory provisions, the letter must contain information on:
  1. the expected date of the transfer;
  2. the reasons for the transfer;
  3. the legal, economic and social effects of the transfer on the seller’s employees;
  4. any intended actions concerning the employment conditions of the seller’s employees.

3. Inform / Notify

• the employees’ representatives or employees directly (if no trade union body exists) of the asset deal transaction at least one month prior to the anticipated date of transfer, using the notification letters described in Section 2.1. above.

4. Consult

• and negotiate with the employees’ representatives (unions, works council, works trustees) on the intended actions concerning employment conditions in order to reach an agreement no later than one month prior to the intended actions being taken (no such obligation exists if there are no employees’ representatives);
• employees’ representatives over the relevant issues (if applicable according to section 1.4.).

5. Implement

• Not applicable.

1. Check whether:

• sections 27 – 31 of the Slovak Labour Code apply to the transaction (the Acquired Rights Directive is implemented in these provisions). These sections apply to transactions in which the assets being transferred constitute an economic unit of the employer or part of the employer (if this is the case, the obligations stipulated in sections 2 – 6 must be observed);
• any internal regulations or collective bargaining agreements exist granting individual employees additional entitlements as a result of the transaction;
• any employment agreements exist which contain provisions granting employees special entitlements as a result of the asset deal transaction;
• any internal regulations or collective bargaining agreements exist specifying statutory obligations to inform and/or consult employee representative bodies (trade unions, works councils) on the transaction;
• any other provisions in collective bargaining agreements must be observed (as a new employer, the purchaser must adhere to the provisions of the collective bargaining agreement concluded by and between the original employer and a trade union until the end of its term);
• any employees’ representative bodies exist; unless agreed otherwise between the purchaser and the representative bodies, the bodies’ legal position and function must be preserved until the end of their term of office.

2. Prepare the following in draft form:

• the notification letter regarding the asset deal transaction. According to statutory provisions, the letter must contain information on:
  1. the expected date of the transfer;
  2. the reasons for the transfer;
  3. the legal, economic and social effects of the transfer on the current purchaser’s employees;
  4. any intended actions concerning the employment conditions of the purchaser’s employees.

3. Inform / Notify

• the employees’ representatives or employees directly (if no trade union body exists) of the asset deal transaction at least one month prior to the anticipated date of transfer, using the notification letters described in section 2.1. above.

4. Consult

• and negotiate with the employees’ representatives (unions, works council, works trustees) on the intended actions concerning employment conditions in order to reach an agreement no later than one month prior to the intended actions being taken (no such obligation exists if there are no employees’ representatives);
• the employees’ representatives on the issues of retaining the legal position and function of employee representative bodies after the transaction (if applicable according to section 1.6.);
• the employees’ representatives over the relevant issues (if applicable according to section 1.4.).

5. Implement

• As a new employer, the purchaser must adhere to the provisions of collective bargaining agreements concluded by and between the original employer and a trade union until the end of their term.

6. Other

• If the number of employees of the purchaser after the transaction exceeds 20 and at the same time the Office of Labour, Social Affairs and Family retains people with disabilities among its job seekers, the new employer is obliged to either:
  1. employ a certain number of disabled employees (3.2% of all employees); or
  2. award a contract to a sheltered workshop or directly to an individual with a disability who is self-employed; or
  3. make payments to the Office of Labour, Social Affairs and Family; or
  4. combine the above methods to fulfil the respective obligation.

1. Check whether:

• any internal regulations or collective bargaining agreements exist at the merging parties granting individual employees additional entitlements as a result of the transaction;
• any employment agreements with any of the merging parties exist which contain provisions granting individual employees special entitlements as a result of the merger transaction;
• any internal regulations or collective bargaining agreements exist at any of the merging parties specifying statutory obligations to inform and/or consult employees’ representative bodies (trade unions, work councils) on the transaction;
• any other provisions in collective bargaining agreements must be observed (the new employer must adhere to the provisions of collective bargaining agreements concluded by and between the original employer and a trade union until the end of their term);
• any employees’ representative bodies exist at any of the merging parties; unless agreed otherwise between the new employer and representative bodies, these bodies’ legal position and function as employees’ representatives must be preserved until the end of their term of office.

2. Prepare the following in draft form:

• The notification letter regarding the upcoming merger. According to the statutory provisions, the letter must contain information on:
  1. the expected date of the merger;
  2. the reasons for the merger;
  3. the legal, economic and social effects of the merger on the employees of the merging parties;
  4. any intended actions concerning the employment conditions of the employees of the merging parties.

3. Inform / Notify

• the employees’ representatives or employees directly (if no trade union body exists) of the merger transaction at least one month prior to the anticipated date of merger, using the notification letters described in section 2.1. above.

4. Consult

• and negotiate with the employees’ representatives (unions, works council, works trustees) on the intended actions concerning employment conditions in order to reach an agreement no later than one month prior to the intended actions being taken (no such obligation exists if there are no employees’ representatives);
• the employees’ representatives over the issue of retaining the legal position and function of employee representative bodies after the transaction (if applicable according to section 1.5.);
• the employees’ representatives over the relevant issues (if applicable according to Section 1.3n)

5. Implement

• The new employer (legal successor) must adhere to the provisions of collective bargaining agreements concluded by and between the original employer and a trade union until the end of their term.

6. Other

• If the number of employees of the new employer (legal successor) after the transaction exceeds 20 and at the same time the Office of Labour, Social Affairs and Family retains people with disabilities among its job seekers, the new employer is obliged to either:
  1. employ a certain number of disabled employees (3.2% of all employees); or
  2. award a contract to a sheltered workshop or directly to an individual with a disability who is self-employed; or
  3. make payments to the Office of Labour, Social Affairs and Family; or
  4. combine the above methods to fulfil the respective obligation.