Asset Sale Collective Bargaining Agreement

In the case of an asset agreement, the buyer is required to recognize the syndicate of its predecessor and negotiate with it if the buyer is considered a successor to the work. Generally speaking, a company is considered a successor if: (1) the majority of the company`s workforce was previously employed by the predecessor and (2) there is a high continuity of business of both companies. One of the main differences in the operation of a unionized establishment is that the company is often less flexible on a number of issues. For example, in a non-union environment, the company has a wide margin of appreciation with regard to the recruitment, promotion and dismissal of employees. However, in union opportunities, hiring decisions may be limited by recall rights of previously dismissed employees or by requirements that allow the position to be offered primarily to an existing employee in the bargaining unit. If a business has never operated an establishment with unionized employees, it may not be able to fully identify the significant differences in day-to-day operations with respect to interactions with bargaining unit staff. Whether it is a share transaction or a patrimonial transaction, the status of the existing syndicate and the company`s obligations to the union could have a considerable impact. Where the acquisition is structured as a transfer of shares, the acquirer follows in the footsteps of the target company and is required to comply with the terms of the existing collective agreement. This means that the acquiring company is not able to change the terms and conditions of employment of the workers covered by the existing KNA during the term of the contract, without the agreement of the union. In addition, the National Labor Relations Board has ruled that employers exerting economic pressure to force a union to resume negotiations in full contract constitutes a violation of existing labour laws. When buying assets by a unionized employer, the buyer is cautious. Will not become a random successor. Whatever the type of transaction, the buyer must ensure, when revising existing collective agreements, any obligation to contribute to a pension plan for several employers.

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