My company got sold and no one told us. Is that fair?

I’ve been working at a company for more than 10 years, and it has been a great journey. It’s been like a family to us all. Recent changes made things less enjoyable, but I was coping until I discovered in the news that our business had been sold! Nobody had told us about this. I was infuriated, and I emailed senior people, wanting an explanation. One of them replied, having a go at me and saying my tone was inappropriate.

Am I right in asking for more details on the sale of the business? Am I right to be annoyed by the lack of communication and the verbal abuse I’ve been given? What are my rights as an employee in this situation?

Your employer may not have a legal responsibility to tell you about the sale of the business, but it’s clear they may not value you appropriately.Credit: John Shakespeare

What a shock this must have been. Yes, I think you have every right to be annoyed. Management should be far more concerned with the tenor of their communication than the tone of yours.

But that’s just my lay opinion. I asked Dr Stephen Clibborn from the University of Sydney to give us the benefit of his experience and expertise. He’s an associate professor in the discipline of work and organisational studies at the university’s business school and co-director of the Sydney Employment Relations Research Group (SERRG).

He told me we might consider this case from three main perspectives: legal, people management and business management.

“The general legal principle is that a business doesn’t own its workers like it owns assets,” he said. “Despite employers commonly saying that their most valuable assets are their workers, employees are not actually business assets. Therefore, an employee can’t be transferred from one employer to another without that employee’s agreement.

“So if the business in this case was sold to another organisation, it is unlikely that sale included the sale of its employees without each employees’ agreement. However, if this did happen, it may have triggered redundancy rights for the employees.

It is possible that the new owners see the value of the business they have acquired in something other than its workers.

Dr Stephen Clibborn, University of Sydney

“What I suspect has happened here is that the company employing the reader was sold. If this is the case, the reader would still be employed by the same legal entity – the company. In a strict legal sense, nothing has changed in their employment relationship – their employer remains the same, their accrued entitlements remain, etcetera. It is just a change in shareholding of the company that employs them.”

But Dr Clibborn said that even in such a case, there may still have been legal requirements for the employer to consult its employees. If you are on an award or have signed an enterprise agreement, keep in mind that they “contain standard consultation clauses requiring employers to consult their employees in the event of any major workplace change”.

Even if we put aside legal requirements, this is “well, well short of best practice from a people management perspective”, Dr Clibborn said.

“Even if there is no legal obligation to obtain employees’ agreement to transfer ownership of this business, it is good management to involve workers in discussions regarding changes that impact them. Utilising effective change management practices will ensure retention of key staff and their ongoing productivity. We can see the direct consequence of failure to do so in the reader’s fury at being kept in the dark.”

But why would a management team fail to take such seemingly basic communication steps? Dr Clibborn says this is where the “hard-nosed business perspective” might hold some answers.

“It is possible that the new owners see the value of the business they have acquired in something other than its workers. They might only value, for example, the business’ intellectual property or some other asset.

“Perhaps the purchaser of the business is a private equity firm that wishes to profit from future sale of the assets, or a larger firm that already has the workers it needs as it absorbs the new business’ valuable assets.”

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