Employment issues in M&A transactions in Poland

• any internal regulations exist at the target company granting individual employees additional entitlements as a result of the transaction (e.g. employment guarantees, golden parachutes etc.);
• any employees’ representative bodies (trade unions, works council, etc.) exist at the target company, and whether any internal regulations exist at the target company governing the information and/or consultation of employee representatives in relation to the transaction;
• the purchaser’s internal regulations provide any additional entitlements to the purchaser’s staff (e.g. transaction bonuses, bonuses related to income of capital group) or employees’ representative bodies.

• Not applicable, unless stated otherwise in the internal regulations in force at the target company.

• Not applicable, unless stated otherwise in the internal regulations in force at the target company or if the transaction is going to affect the financial standing or business of the purchaser. If the latter, there may be a need to inform the works council (if any).

• Not applicable, unless stated otherwise in the internal regulations in force at the target company.

• Not applicable, unless stated otherwise in the internal regulations in force at the target company.

• any internal regulations exist granting individual employees additional entitlements as a result of or in connection with the transaction (e.g. information or consultation entitlements) which must be observed by the target company;
• any internal regulations exist at the target company granting employees’ representative bodies (trade unions, works councils, if such bodies exist) additional information or consultation entitlements in connection with the transaction which must be observed by the target.

• Not applicable, unless stated otherwise in the internal regulations in force at the target company.

• Not applicable, unless stated otherwise in the internal regulations in force at the target company or if the transaction is going to affect the financial standing or business of the purchaser. If the latter, there may be a need to inform the works council (if any).

• Not applicable, unless stated otherwise in the internal regulations in force at the target company.

• Not applicable, unless stated otherwise in the internal regulations in force at the target company.

• the assets constitute a stable commercial venture or its part (going concern). . If so, the transaction will be deemed a transfer of undertakings within the meaning under the Acquired Rights Directive, and the obligations defined in sections 2 to 6 below will apply. The transfer of undertakings applies to employees, i.e. employees hired on the basis of an employment agreement, and does not apply to employees hired on the basis of service agreements or those with their own registered business (self-employed);
• any internal regulations exist granting individual employees additional entitlements as a result of the transaction;
• any internal regulations exist governing the information and/or consultation of employees’ representative bodies (trade unions or works councils, if such bodies exist) in relation to the transaction;
• any outstanding obligations exist resulting from the employment of the personnel to be taken over. If an organised part of an undertaking is transferred, the seller will be jointly and severally liable with the purchaser.

• notification letters regarding the planned transfer. The letters must contain information on: (I) the expected date of the transfer; (II) the reason(s) for the transfer; (III) the legal, economic and social consequences of the transfer for the seller’s employees; and (IV) any anticipated measures relating to the employment conditions of the seller’s employees, concerning work, remuneration and re-qualification conditions in particular.

• the works council operating at the seller (if such a body is in place), if the transaction influences: (I) the seller’s activity and economic situation; (II) the situation and structure of employment at the seller; or (III) how work is organised or the basis of employment at the seller if the transaction results in material changes in this respect.
• individual employees or, alternatively, trade union organisation(s) (if such bodies are in place at the seller) of the transfer at least 30 days before the anticipated transfer date, using the notification letters described in section 2.

• the works council operating at the seller (if such a body is in place) if the transaction influences: (I) the situation or structure of employment at the seller; or (II) how work is organised or the basis of employment at the seller if the transaction results in material changes in this respect.
• Only if any changes to employment conditions are planned by the seller in connection with the transaction, the seller must negotiate with the trade unions operating at the seller (if such bodies are in place)  in order to enter into an agreement regarding these changes  within 30 days of informing the trade unions of these plans.
• If trade unions and works councils are not in place, there is no duty to consult.

• Not applicable, unless stated otherwise in the internal regulations in force at the target company.

• Transfer the personnel files of the transferred employees to the purchaser.
• If a company social benefit fund has been set up at the seller, transfer this to the purchaser (or a proportion thereof where an organised part of an undertaking is being transferred).
• De-register the transferred employees from the Social Security Institution within seven days after the transfer.
• If the seller no longer employs any employees after the transaction, it will need to de-register itself as a payer of social security contributions from the Social Security Institution and inform this body of the transfer within 7 days after it takes place.
• If a transferred employee is a foreigner who has a work permit/simplified declaration, the seller for which a work permit was issued must report the transfer to the local immigration authorities in writing within 7 days after the transfer.

• the assets constitute a stable commercial venture (going concern). If so, the transaction is deemed to be a transfer of undertakings within the meaning under the Acquired Rights Directive, and the obligations defined in sections 2 to 6 below apply. The transfer of undertakings applies to employees i.e. employees hired on the basis of an employment agreement and does not apply to employees hired on the basis of service agreements or those with their own registered business (self-employed);
• the seller’s employees subject to the transfer are receiving any pay benefits apart from their basic salary. If so, the purchaser is obliged to observe these after the transfer, until remuneration conditions are changed in accordance with a specific alteration procedure. It is necessary to obtain the consent of each individual employee. A lack of such consent may lead to termination of employment. If the benefits are granted in a collective bargaining agreement, the purchaser cannot change them for one year after the transaction. More beneficial pay regulations in force at the purchaser will also apply to transferred employees, however;
• any internal regulations exist at the seller or at the purchaser granting individual employees additional entitlements as a result of the transaction which must be observed by the purchaser (e.g. employment guarantees or golden parachutes);
• any employees’ representative bodies (trade unions, works councils, etc.) exist at the seller, as these may be subject to transfer to the purchaser together with the employees;
• any internal regulations exist at the purchaser granting employee representative bodies (trade unions or work councils, if such bodies exist) rights of information and/or consultation in relation to the transaction which must be observed by the purchaser;
• any outstanding obligations exist resulting from the seller’s employees’ employment relationships. If the assets constitute an undertaking (the whole business), the purchaser will be solely liable for them. If the assets constitute an organised part of the undertaking, the purchaser will be severally liable with the seller;
• the seller is in arrears as regards paying taxes and social security contributions;
• the purchaser’s internal regulations provide any additional entitlements to purchaser’s staff (e.g. transaction bonuses, bonuses related to income of the capital group) or employees’ representative bodies.

• notification letters regarding the planned transfer. The letters must contain information outlining: (I) the expected date of the transfer; (II) the reason(s) for the transfer; (III) the legal, economic and social consequences of the transfer for the purchaser’s employees; and (IV) any anticipated measures relating to the employment conditions of the purchaser’s employees, particularly with regard to work, remuneration and re-qualification conditions. The letters must be finalised at least 30 days before the anticipated transfer date.

• the works council operating at the purchaser (if such a body exists), if the transaction influences: (I) the purchaser’s activity and economic situation; (II) the situation or structure of employment at the purchaser; or (III) how work is organised or the basis of employment at the purchaser, if the transaction results in material changes in this respect.
• the individual employees or, alternatively, trade union organisation(s) (if these exist at the purchaser) of the transfer at least 30 days before the anticipated transfer date, using the notification letters described in section 2 above.

• the works council operating at the purchaser (if such a body exists) if the transaction influences: (I) the situation or structure of employment at the purchaser; or (II) how work is organised or the basis of employment at the purchaser, if the transaction results in material changes in this respect.
• If changes to employment conditions are planned by the purchaser in connection with the transaction, the purchase must negotiate with the trade unions operating at the purchaser (if such bodies are in place) in order to enter into an agreement regarding these changes within 30 days of informing the trade unions of these plans.

• Work organisation regulations, if: (i) the number of employees after the transaction amounts to at least 50; (ii) or the trade union (if one exists) requests it, if the number of employees is more than 20 but less than 50, unless such regulations already exist at the purchaser. If trade union bodies exist at the seller, these groups must be involved in the implementation process.
• Regulations on compensation conditions and other work-related benefits, if: (i) the number of employees after the transaction amounts to at least 50; or (ii) the trade union (if one exists) requests it, if the number of employees is more than 20 but less than 50, unless such regulations already exist at the purchaser. These regulations may stipulate that a social fund is not set up at the purchaser. If trade union bodies exist at the seller, these groups must be involved in the implementation process.
• Company social fund by-laws regulating social benefits available to the purchaser’s employees, if: (i) the number of employees after the transaction amounts to at least 50; or (ii) the trade union (if one exists) requests it, if the number of employees is more than 20 but less than 50, and the compensation regulations do not stipulate that a social fund is not to be established. If trade union bodies exist at the seller, these groups must be involved in the implementation process.
• Remote work regulations (only if they will be transferred and there are no such regulations at the purchaser). If trade union bodies exist at the purchaser, they must be involved in the implementation process.

• Collect and maintain the personnel files of the transferred employees of the purchaser.
• If a company social benefit fund has been set up at the seller, administer the transferred fund (or a proportion thereof where an organised part of an undertaking is being transferred).
• Conclude an agreement on the management of Employee Capital Plans in the name and on behalf of the employees with the same financial institution with which the seller has concluded an agreement on management of Employee Capital Plans, It must be done within 7 days from the date of transfer. However, this general rule should be double-checked from the perspective of the transaction’s perimeters because there may be exemptions and additional steps to proceed.
• The transferred employees have a right to terminate their employment upon seven days’ notice within two months following the transfer. For the employee, such termination has the same consequences as those envisaged for termination of the employment upon notice by the employer.
• Past employment with the seller will count as continuous employment with the purchaser. New employment contracts do not have to be entered into between the purchaser and the transferred employees.
• Register the transferred employees with the Social Security Institution within seven days following the transfer.
• If the headcount reaches or exceeds 100 employees after the transaction, the purchaser should create a H&S service.

Mergers always result in a transfer of undertakings within the meaning under the Acquired Rights Directive. Consequently, the following obligations apply.

• employees subject to the transfer are receiving any pay benefits apart from basic salary. If so, these benefits must be observed after the merger by the surviving entity (or new entity) until the remuneration conditions are changed in accordance with a specific alteration procedure. The individual consent of each employee is necessary here. A lack of such consent may lead to termination of employment. If the benefits are granted in a collective bargaining agreement, they cannot be changed for one year after the transaction. More beneficial pay regulations in force at the surviving entity (or new entity) after the merger, however, will also apply to transferred employees;
• any internal regulations exist at either party granting individual employees additional entitlements as a result of the transaction (e.g. employment guarantees or golden parachutes);
• any employees’ representative bodies (trade unions or works councils) exist at either party, as these bodies may be subject to transfer to the surviving entity (or new entity) together with the employees;
• any internal regulations exist at either party governing the information/consultation of employees’ representative bodies (trade unions or works councils, if such bodies exist) in relation to the merger;
• any outstanding obligations exist arising out of the employment relationships of either party’s employees subject to the transfer. The surviving entity (or new entity) will be solely liable for meeting such obligations;
• either party is in arrears as regards transferring taxes and social security contributions.

• notification letters regarding the planned transfer. These letters must contain information on: (I) the expected date of the transfer; (II) the reason(s) for the transfer; (III) the legal, economic and social consequences of the transfer for the employees; and (IV) any anticipated measures concerning the employment conditions of either party’s employees, concerning work, remuneration and re-qualification conditions in particular.

• the works council operating at either party (if any such exists), if the transaction influences: (I) their activity and economic situation; (II) the situation or structure of employment at either party; or (III) how work is organised or the basis of employment at either party if the transaction results in material changes in this respect.
• individual employees or, alternatively, trade union organisations (if such a body exists at either party) of the transfer at least 30 days before the anticipated transfer date, using the notification letters described in section 2 above.

• Works councils operating at either party (if such bodies exist), if the transaction influences: (I) the situation or structure of employment at either party; or (II) how work is organised or the basis of employment at either party if the transaction results in material changes in this respect.
• If changes to employment conditions are planned by either party in connection with the transaction, that party must negotiate with the trade unions operating at it (if such bodies are in place) in order to enter into an agreement regarding these changes within 30 days of informing the trade union of these plans.

• The work-related organisational regulations at the surviving entity (or new entity) if: (i) the number of employees after the transaction amounts to at least 50; or (ii) the trade union (if one exists) requests it, if the number of employees is more than 20 but less than 50, unless such regulations are already in force at the surviving entity. If trade union bodies exist at the surviving entity (or new entity), these groups must be involved in the implementation process.
• The regulations on remuneration conditions and other work-related benefits at the surviving entity (or new entity), if: (i) the number of employees after the transaction amounts to at least 50; or (ii) the trade union (if one exists) requests it, if the number of employees is more than 20 but less than 50, unless such regulations are already in force at the surviving entity. These regulations may stipulate that a social fund is not set up at the surviving entity (or new entity). If trade union bodies exist at the surviving entity, these groups must be involved in the implementation process;
• The company social fund by-laws regulating social benefits available to the employees of the surviving entity (or new entity), if: (i) the number of employees after the transaction amounts to at least 50; or (ii) the trade union (if one exists) requests it, if the number of employees is more than 20 but less than 50, and the compensation regulations do not stipulate that a social fund is not to be set up. If trade union bodies exist at the surviving entity (or new entity), these groups must be involved in the implementation process;
• Remote work regulations only if they will be transferred and there are no such regulations at the acquiring company. If trade union bodies exist at the acquiring company, they must be involved in the implementation process.

• The personnel files of employees subject to the transfer must be transferred to the surviving entity (or new entity).
• If a social benefit fund has been set up at either party, this must be transferred to the surviving entity (or new entity).
• Conclude an agreement on the management of Employee Capital Plans in the name and on behalf of the employees with the same financial institution with which the seller has concluded an agreement on management of Employee Capital Plans, This must be done within 7 days from the date of transfer. However, this general rule should be double-checked from the perspective of the transaction’s perimeters because there may be exemptions and additional steps to proceed (e.g. if the Plans exist at both parties).
• Transferred employees must be de-registered from the Social Security Institution within seven days after the transfer by the absorbed entities.
• The absorbed entities must be de-registered as payers of social security contributions from the Social Security Institution within 7 days after the transfer.
• The new entity must be registered as a payer of social security contributions at the Social Security Institution within seven days after the transfer. The same obligation applies to the surviving entity if it did not employ any employees before the transfer.
• Transferred employees must be registered at the Social Security Institution within seven days after the transfer by the surviving entity (or new entity);
• Past employment will count as continuous employment with the surviving entity (new entity). New employment contracts do not have to be entered into.
• If a transferred employee is a foreigner who has a work permit, the entity for which a work permit was issued must report the transfer to the local immigration authorities in writing within 7 days after the transfer.
• If the headcount reaches or exceeds 100 employees after the merger, a H&S service must be created at the surviving entity (or new entity).