Asia: Transfer of business/undertaking

Questions

Singapore

Japan

India

Hong Kong

Is there a statutory definition for transfer of business/undertaking?

Yes. Under the Employment Act, a 'transfer' includes 'the disposition of a business as a going concern and a transfer effected by sale, amalgamation, merger, reconstruction or operation of law". This includes intra-group reorganisations.

No.

Yes, for employees who are 'workmen' (ie individuals who are not employed in a managerial or administrative capacity or supervisors who earn less than INR10,000 a month), a transfer scenario arises where "the ownership or management of an undertaking is transferred, whether by agreement or by operation of law, from the employer in relation to that undertaking to a new employer".

No..

Is there a principle of automatic transfer of employment contracts in the event of a transfer of business/undertaking?

Yes, for employees who are covered under the Employment Act.

The employee automatically transfers to the transferee on their existing terms of employment with continuity of service.

No.

No, although there are statutory protections afforded to 'workmen' who are not taken on by the transferee under the Industrial Disputes Act.

Workmen with at least one year of continuous service are entitled to the same notice and compensation (calculated to the transfer date) as they would be entitled if made redundant; unless:

• the service of the employee is not interrupted by the transfer;
• the terms of employment offered by the transferee are no less favourable; and
• the transferee recognises the employee's length of service prior to the transfer for the purpose of compensation payable if the employee is made redundant in the future.

No.

Can the terms of employment of employees being transferred be harmonised with the transferee's existing workforce?

In the event of an automatic transfer, the employees are transferred on their existing terms of employment. Any amendments will require the employees' consent.

A transfer involves the employee resigning from the existing employer and being newly employed by the new employer. As such, the new employer can offer employment to the transferring employee on any terms it wishes. However, if the terms are not satisfactory to the employee, the employee can choose to stay with the existing employer. Therefore, in practice, the transferring employee and the transferee will negotiate mutually satisfactory terms before the transfer.

A transfer involves the employee resigning from the existing employer and being newly employed by the new employer. As such, the new employer can offer employment to the transferring employee on any terms it wishes.

Note that certain employees may be entitled to notice and termination payments if the terms of employment offered by the new employer are less favourable than the existing terms of employment (see above).

A transfer involves the employee resigning from or being terminated from the existing employer and being newly employed by the new employer. As such, the new employer can offer employment to the transferring employee on any terms it wishes.