What is your employees' position in a post-acquisition move?

In many cases, we see that after the business acquisition of an online store or sales account, a buyer considers moving the operation of the business to its current premises and location. That may be a location nearby, but online businesses are basically not location-specific, so it may be further away. If there are staff working for the online business or sales account, it is important to educate yourself in advance about the needs of these employees and the applicable regulations regarding this.
 

On this page, we will explain to you the regulations: what are your rights as an employer and what are your obligations.

Moving after a business acquisition

Entrepreneurs acquiring an online business will want to get to know the acquired business well and have a good view of the operation. Then it's nice when the new acquisition can be located in a location where the entrepreneur already has businesses or where he or she lives. Especially with online stores and sales accounts, we often see that the buyer wants to house the acquired business in a location that is already rented in order to save directly on overhead costs.

So, in other words, there is often moving after the business acquisition of an online store. And of course, as a business owner, you are free to make that decision. But when you don't live near the acquired business, a move has an impact on your new employees. And that leads to the question of whether an employee moves with you when you relocate.

Does an employee move with you?

If you decide to move the company after an acquisition, then of course that decision does not end the employment contract. So in principle, employees do indeed move with you when the business moves.

But online businesses are basically location independent. Therefore, we very often see that buyers do not live near the sellers. If the company then moves and thus the employee's place of employment moves, the travel time may become so long that this is/seems unworkable for employees. This is where a business owner will often encounter objections from the staff.

Extra travel time for the employee

The limit of what constitutes reasonable travel time is quite high: generally, 1.5 hours (one way) is still considered acceptable by agencies such as the UWV. In any case, employees are expected to try traveling for at least a period of time before claiming any arrangement. Incidentally, an employee's personal situation can affect the determination of the length of acceptable travel time (think care responsibilities or physical limitations).

But regardless of the official review framework, a more important question is what your employees' wishes are. So always engage in consultation at an early stage in order to jointly look at any relocation with mutual understanding. After all, part of a company's value is in its employees, and you may well be within your rights if you wish to relocate. But if everyone subsequently resigns, your right in this matter will be of little use to you.

Dismissal of employees upon relocation

If an employee does not accept the extra travel time and does not want to move, in many cases the employment relationship cannot continue and for the business owner this will be reason to terminate the employment contract. 

Often the employee will then ask for severance pay, and since the move is a (not necessarily necessary) decision of the employer, in many cases the employee is also entitled to it. What is important then is that the employee has cooperated and participated in reasonable proposals from the business owner. But then again, what is reasonable?

Compensation in the event of a move

Severance pay

If the business owner makes a reasonable (...) proposal to address the employee's concerns, that may be grounds for limited or no severance pay. A judge may review this.

Relocation allowance

Employees who move with you after the acquisition are usually offered relocation compensation. If the employer offers a reasonable moving allowance and the employee refuses, this may be grounds for mitigation of severance pay.

Travel reimbursement

Several solutions are conceivable here: compensation for mileage, or the business owner allows employees to travel (in part) during working hours, and if work permits, the employee could be offered to work partly from home.

Apart from the fact that it is only reasonable to compensate employees for the disadvantages they experience due to your decision to relocate, it is also important by law to demonstrate that you have offered reasonable compensation arrangements when it comes to a dismissal and determining the size of the severance payment.

Conclusion

In summary, it is up to you as a business owner to decide whether to relocate after an acquisition or not. And a travel time (one way trip) of an hour and a half is considered a limit to what can be expected of an employee. But, of course, one is under no obligation to stay with you. Also, if you are happy to retain staff, enter into early discussions with the employees involved and make sure you have reasonable compensation arrangements.

Businesssforsale.eu works with a network of professionals who can provide you with legal advice on the relocation of your acquired online business. Please contact us for more information and a free quote.