The news often comes as a surprise: the business is sold, a site is spun off, or a new operator takes over. Employees then wonder whether their employment contract ends, whether they have to sign a new one and what happens to salary, vacation or severance pay. The most important basic rule is: a genuine transfer of business is usually not a fresh start from scratch.
In Austria, the Labour Contract Law Adaptation Act (Arbeitsvertragsrechts-Anpassungsgesetz) protects existing employment relationships. Nevertheless, collective agreements, works agreements, organization or contact persons can change. Anyone who wants to secure their claims should therefore not rely solely on the promise "Everything will stay the same", but should examine the transfer in a structured way. This guide shows what Employees in a business transfershould know and document.
When does a business transfer actually take place?
A business transfer, in simplified terms, occurs when an enterprise, business or part of a business passes to a new owner and the economic entity essentially retains its identity. Typical cases are sale, leasing, change of operator/lessee, merger or the takeover of a part of the business.
The current Arbeiterkammer information on change of ownership nennt etwa Verkauf, Verpachtung und Fusionierung. Die WKO on business transfers weist darauf hin, dass auch ohne direkten Vertrag zwischen alter und neuer Betreiberseite ein Übergang vorliegen kann. Entscheidend ist die tatsächliche Fortführung, nicht die Überschrift auf einer Vereinbarung.
Not every change of ownership or management is automatically a transfer of undertaking. If only company shares are sold while the employer remains the same legal entity, there can be no change of employer under employment law. Likewise, a mere change of management does not terminate employment relationships.
Five indicators for the initial check
- Who is the legal employer before and after the reference date?
- Are premises, equipment, machinery or essential operating resources taken over?
- Do the activity, clientele, organization or business purpose remain recognizably intact?
- Will a substantial part of the workforce continue to be employed?
- Does the business continue without a prolonged interruption?
No single feature is always decisive on its own. Whether an economic unit retains its identity depends on the specific business. In a labor-intensive service operation, the transfer of the workforce may carry more weight than in a capital-intensive manufacturing operation.
The employment contract continues automatically
If a transfer of undertaking occurs, the acquirer generally steps into the existing employment relationships. The legal basis can be found in §§ 3 ff. of the Employment Contract Law Adjustment Act in the RIS. The employment relationship is not terminated and re-established, but continues with the new employer.
This has important consequences:
- The previous period of service remains preserved.
- The contractual entitlement to remuneration is generally transferred.
- Outstanding vacation entitlements are not lost.
- Time credits and claims already accrued must continue to be taken into account.
- Accrued benefits, such as Abfertigung Alt, do not become payable solely because of the transfer.
- The employment relationship is not finally settled on the day of transfer.
A new employment contract is not required for this. If one is nevertheless presented to you, you should compare it line by line as you would a new offer. Our guide to "Review the employment contract and the written statement of employment conditions zeigt, worauf bei Aufgaben, Arbeitsort, Arbeitszeit und Klauseln zu achten ist.
Do not sign a new contract out of routine
A change of employer must be documented. However, that does not mean employees must accept worse conditions. Problematic formulations include phrases like "replaces all previous agreements", a new start date, a new probationary period, a waiver of claims, or a more broadly worded transfer clause.
Compare in particular:
- Start date and credited prior service periods,
- Job title, tasks and scope of responsibility,
- Work location, remote work and possible transfers,
- Weekly hours, timing of working hours and overtime,
- Base salary, above-scale pay, allowances, commissions and bonus rules,
- Collective agreement and job classification,
- Vacation, time credits and special arrangements,
- Non-compete, repayment or confidentiality clauses.
Do not sign on the same day if changes are included. Ask for a version that shows the changes and take the documents with you for review. An acknowledgement of receipt for information is not the same as consent to a new contract; pay attention to the exact heading and wording.
What happens to salary and above-scale pay
The new employer generally assumes the contractual rights and obligations. An above-scale pay agreed in an individual contract does not automatically become a voluntary benefit simply because the business was sold. Regular allowances or commissions can also be part of the contract or an established company practice.
The AK states that the collective agreement remuneration due for normal working hours must not be reduced by a change of collective agreement. Employees who were paid under a collective agreement retain their contractual entitlement to pay; a reduction generally requires a valid agreement.
Secure the most recent payslips, commission statements, target agreements, and bonus commitments before the deadline. With our article on Checking the payslip you can systematically record base salary, allowances, and deductions.
Collective agreement may still change
The continuation of the employment contract does not mean that all collective rules remain unchanged. If the collective agreement affiliation changes due to the new employer, a different collective agreement may apply in the future. This affects, for example, minimum salaries, special payments, working time models, surcharges, or termination rules.
Therefore, you should not only compare the total salary. Check:
- Which classification or employment group will apply in the future?
- Will previous periods of service be fully credited for classification?
- Do surcharges for night, Sunday, or public holiday work change?
- How are special payments calculated?
- Do different standard working hours or notice periods apply?
Our guide to Checking the collective agreement and classification helps with the comparison. In cases of substantial deterioration due to a change of collective agreement or works agreement, a special right to terminate may exist. The assessment is difficult and, according to the AK, the deadline is short; get advice before giving notice yourself.
Works agreements and company benefits
Works agreements may, depending on the situation, continue to apply, be replaced by rules in the new company, or give rise to other legal consequences. This concerns, for example, flexitime, working from home, time tracking, social benefits, bonuses or the use of IT systems.
Even more difficult are benefits that were never properly documented: meal subsidies, parking, additional days off or regular bonuses. Therefore note not only the employment contract but also the benefits actually provided. What then matters is whether they are based on an individual contract, a works agreement, a collective agreement or merely a voluntary promise.
Special rules apply to company pensions. The WKO overview of the AVRAG names a right to object for certain company pension commitments that were not assumed. Expert advice should be obtained before making a declaration, especially in these cases.
Document leave, time balances and severance pay
Outstanding vacation is not automatically paid out as a result of the business transfer because the employment relationship does not end. The same basic principle applies to existing time balances and other ongoing entitlements. In practice, disputes often arise not over the legal entitlement but over incomplete data at the time of transfer.
Create a personal record before the cut-off date:
- Remaining vacation by vacation year,
- Plus and minus hours,
- outstanding extra or overtime hours,
- travel expenses not yet settled,
- commissions, bonuses or target achievements,
- claims arising from Abfertigung Alt or a company pension fund,
- ongoing parental leave, educational part-time leave or other agreements.
If in doubt, request confirmation in writing. Keep documents private and in compliance with data protection; do not take trade secrets or personal customer data with you.
A dismissal due to the transfer is not permitted
Employees must not be dismissed simply because the business is transferred. However, this is not an absolute ban on dismissal in connection with every sale. A dismissal may be permissible for other, genuinely organizational, economic or personal reasons.
The true reason is decisive. Warning signs include:
- The termination is expressly justified by the takeover.
- Employees are expected to resign shortly before the transfer and reapply.
- Only people with more expensive legacy contracts are being singled out.
- The new operator immediately fills the same roles.
- Pressure is being exerted to obtain an amicable termination.
Anyone who receives a termination close in time to the transfer must act quickly. The AK advises communicating the wish to continue without unnecessary delay and, in case of dispute, to consider filing a declaratory action. In addition, very short deadlines may apply to challenges to dismissals. The general AK information on employer dismissal nennt häufig zwei Wochen, in manchen Fällen sogar nur eine Woche. Kontaktieren Sie daher sofort Betriebsrat, Gewerkschaft oder Arbeiterkammer.
What information employees must be given
If there is no works council, the affected employees must be informed in writing in advance about the planned date, the reason, the legal, economic and social consequences, and any planned measures. According to the WKO, the information can also be provided by a suitable, easily accessible notice. If a works council exists, it must be informed.
A useful notice should provide concrete answers:
- Which legal entity will be the new employer?
- Which business or part of the business is affected?
- On what day will the transfer occur?
- Will the collective agreement, works agreements, or the organization of work change?
- What measures are planned regarding personnel, locations, or tasks?
- Who answers questions about pay, vacation, and benefits?
A mere marketing message about 'new opportunities' does not replace this information. Submit any open questions together and in writing, ideally through the works council.
The ten-point document check
- Save the employment contract and all addenda.
- Check the current employment record and the original start date.
- Keep the last six payslips.
- Document remaining leave, time balances, and outstanding overtime.
- Gather bonus, commission, and target agreements.
- Note the applicable collective agreement and classification.
- Record relevant company agreements and individual commitments.
- Clarify company pension and pension fund.
- Read the written information about the transfer and mark any questions.
- Compare each new document with the previous version before signing.
Three typical practical cases
Case 1: An inn takes on a new leaseholder
The business continues to operate at the same location with the same kitchen, furnishings, offerings and staff. That strongly indicates a transfer of undertaking. Employment relationships generally continue; employees must not accept new, worse contracts solely because of the change of leaseholder.
Case 2: A company's shares are sold
The company remains the employer; only its ownership structure changes. In terms of employment law there may therefore possibly be no change of employer. New owners or new management may later implement organizational measures, but the share purchase itself does not terminate employment contracts.
Case 3: A canteen is put out to tender
Another operator takes over premises, equipment and the ongoing canteen operation. Even without a direct contract between the old and the new operator, a transfer of business may exist. If personnel are dismissed at the same time and new staff are sought for identical tasks, the situation should be examined immediately.
Special case: apprentices
Apprenticeship relationships can also be transferred to the successor business. In addition, the new authorized trainer must meet the requirements for providing training. The version updated in June 2026 WKO-Information zu Betriebsübergang und Lehrlingen explains when changes to apprenticeship contracts are possible and what role the apprenticeship office plays.
Apprentices and their legal guardians should clarify in writing the training authorization, the new trainer, the training location and the continuation of the vocational training. In case of problems, the apprenticeship office, the Chamber of Labour or the union should be involved at an early stage.
Frequently asked questions about transfers of business
Do I have to sign a new contract with the new owner?
No. The existing employment contract is generally transferred automatically in a transfer of business. A document recording the change of employer can be useful. If it contains additional changes, you should have them reviewed before signing.
Can I simply object to the transfer?
There is no general unrestricted right to object in Austria. For particular situations, such as certain company pension cases, exceptions may apply. Do not make any statement before the specific case has been reviewed.
Will I receive my severance pay?
Not merely because of the business transfer, since the employment relationship does not end. Claims and entitlements generally continue. Which rules for the old or new severance scheme apply depends on the respective employment relationship.
Can the salary be reduced immediately?
The contractual entitlement to remuneration generally prevails. A change of collective agreement may alter certain framework conditions, but does not automatically permit reducing a salary agreed in an individual contract. Have any concrete amendment agreement reviewed.
What should I do in case of a dismissal?
Contact the works council, trade union, or Chamber of Labour immediately. Dismissals because of the transfer are not permitted, but other grounds for dismissal may be possible. Because deadlines can be very short, you should not wait for the next payslip or the actual transfer.
Conclusion: Ensure continuity, review changes individually
A transfer of business does not, as a rule, terminate the job. The employment contract, length of service and many entitlements continue with the new employer. Practical risks include poorly documented balances, a change of collective agreement, altered works agreements or new documents that govern more than the mere change of employer.
Your next step: Create a single-page inventory before the transfer with start date, role, workplace, hours, pay, classification, vacation, accrued time balances, bonus and pension arrangements. Compare every subsequent piece of information against it. If there is a termination, deterioration or unclear pension arrangements, seek individual advice immediately.
