My company was taken over and my new employer wants to change my contract terms. Can they?

What the Law Says

The protection comes from the EU Acquired Rights Directive, which all EU Member States have transposed into national law. It ensures continuity of employment and preserves your rights when a business — or part of it — is transferred to a new owner.

When your company is taken over — whether by merger, acquisition, or asset sale — the Directive applies if there is a 'transfer of an economic entity which retains its identity'. This includes most business takeovers involving staff, assets, and activities.

Your existing contract terms — pay, hours, holiday entitlement, notice periods, and collective agreements — transfer automatically to the new employer. The new employer steps into the shoes of the old one: they inherit both rights and obligations.

Any variation of your contract terms is automatically void if the sole or principal reason is the transfer itself. Exceptions exist only if the change is for an 'economic, technical or organisational reason entailing changes in the workforce' (an 'ETO reason'). Even then, the change must be justified, proportionate, and follow proper procedure — including informing and consulting employee representatives.

Statutory Text

the transfer of a business, establishment or part thereof shall not in itself entail the termination of the contract of employment or employment relationship with the transferor

— Council Directive 2001/23/EC, Art. 3(1) — Protection of employees on transfer of undertakings

Statutory Text

any change in the contract or employment relationship effected by the transferee for a reason connected with the transfer shall be void

— Council Directive 2001/23/EC, Art. 4(1) — Prohibition of detrimental changes

Sources