During 2026, Rankin Business Lawyers is presenting a series of articles providing guidance on what to do when preparing a business for sale. This month we look at the obligations of those selling businesses to their team, covering transfers of employment, staff entitlements and redundancies, and how to communicate change.

Your team is part of the value buyers are purchasing. It is critical that you get the transfer‑of‑business pathway right to preserve continuity, respect entitlements, and communicate clearly.

Misunderstanding transfer rules and entitlements (annual leave, long service leave, redundancy, notice) could lead to compliance risks and damage to team morale.

Under the Fair Work Act transfer‑of‑business rules, a “transferring employee” moves to a new employer within three (3) months with substantially the same duties and there’s a connection between employers (e.g. sale of assets). Recognition of service affects entitlements; details matter.

Three Practical Steps You Can Implement

  1. Map transferring employees and instruments
  • What to do: Call Rankin Business Lawyers to clearly draft employment agreements, identify award/enterprise agreement coverage and whether instruments continue; confirm how service is recognised post‑transfer.
    • Example: If an enterprise agreement applies, it may continue until terminated or replaced.
  1. Clarify entitlements and redundancy scenarios
  • What to do: Decide whether the new employer (if not an associated entity) recognises service for redundancy and annual leave; otherwise, the seller of the business pays out accordingly.
    • Example: If a non‑associated purchaser declines to recognise service, the seller must pay out untaken annual leave and redundancy at termination.
  1. Plan consultation and change communications
  • What to do: Provide clear written notices, FAQs, and contacts; consider redeployment where suitable; manage notice of termination obligations.
    • Example: Structured briefings and Q&A sessions reduce uncertainty and turnover during the process.

Stacey Brennan
Lawyer