What Happens to Your Employees After You Sell Your SME?

After years spent building your company, the time for the handover is approaching. And with it, a question that may be keeping you awake at night: what will become of my employees? The women and men who contributed to the success of your SME deserve your full attention in this sale process.

Good news: in Switzerland, the legal framework effectively protects employees during a business transfer. But beyond the law, a successful transfer relies on meticulous preparation and transparent communication. Discover how to secure the future of your teams while successfully completing the sale of your company.

The Swiss legal framework: solid protection for your employees

Article 333 CO: the pillar of employee protection

Swiss law provides a clear mechanism for protecting workers during a business sale. Article 333 of the Swiss Code of Obligations (CO) is the cornerstone of this protection in French-speaking Switzerland as throughout the country.

This fundamental provision establishes a simple but powerful principle: when a business or part of a business is transferred, the employment relationships pass automatically to the acquirer. In concrete terms, this means that:

• Employment contracts are transferred with all the rights and obligations they contain
• Employees' seniority is fully preserved
• Salary conditions remain identical
• Acquired benefits (holidays, bonuses, etc.) are maintained

This automatic continuity of contracts applies whether you sell your SME to a competitor, to an external investor or as part of a family succession.

Joint and several liability: a double guarantee

The Swiss legislator has provided additional protection to reassure employees. The former employer and the new one remain jointly and severally liable for employment claims that fell due before the transfer, for a set period.

This joint and several liability covers in particular:

• Unpaid salaries
• Uncompensated overtime
• Holiday pay owed
• Outstanding social security contributions

For you, as the seller, this means settling all outstanding matters before the sale to avoid later complications.

Employees' right of refusal: a regulated freedom

When can an employee object to the transfer?

While the law organises the automatic transfer of contracts, it forces no one to work for an employer they did not choose. Every employee has a right of refusal that they may exercise if they do not wish to join the acquirer.

This refusal must be expressed within a reasonable time after the transfer is announced. In that case, the employment contract ends on expiry of the statutory or contractual notice period, as if it were a resignation.

In practice, refusals remain rare when the transfer is well prepared and communicated. Employees generally appreciate the stability offered by the continuity of their employment.

The practical implications of a refusal

When an employee refuses the transfer, several consequences follow:

• The contract ends at the end of the ordinary notice period
• The employee is not entitled to severance pay
• Unemployment benefits may be deferred because the end of the employment relationship was voluntary

It is therefore essential to inform your teams clearly about these implications before they make their decision.

The duty to inform: a legal and moral obligation

What the law requires

Article 333a CO imposes a duty of prior information towards employee representatives or, failing that, directly towards the employees concerned. This communication must take place in good time before the transfer.

The information to be provided includes:

• The planned date of the transfer
• The reasons for the sale
• The legal, economic and social consequences for employees
• The measures envisaged concerning employees

If measures affecting employees are planned (restructuring, change of workplace, changes to working hours), prior consultation is mandatory.

Beyond the law: the importance of transparency

When it comes to business transfers in French-speaking Switzerland, success goes well beyond the legal framework. Open, human communication with your employees makes the transition considerably easier.

Here are the best practices to adopt:

• Announce the project as soon as negotiations reach an advanced stage
• Organise team meetings to answer questions
• Introduce the acquirer and their vision for the company
• Remain available for one-to-one conversations
• Communicate regularly on the progress of the process

Collective agreements and occupational pensions

Maintaining collectively agreed rights

If your SME is subject to a collective labour agreement (CLA), the acquirer must comply with it for at least one year after the transfer, unless it expires earlier.

This provision guarantees employees the temporary maintenance of their collectively agreed working conditions, giving them time to adapt to their new environment.

Continuity of occupational pension provision

The question of the second pillar is a legitimate concern for many employees. When an SME is sold, several scenarios are possible:

• The acquirer keeps the same pension fund: no change for employees
• The acquirer has its own pension institution: the assets are transferred
• Change of pension plan: acquired rights are guaranteed

In all cases, the Occupational Pensions Act (LPP/BVG) protects the acquired rights of insured persons. However, the terms of the new plan should be checked carefully to avoid any unpleasant surprises.

Preparing a smooth transfer for your teams

Choosing the right acquirer

Protecting your employees begins with the choice of acquirer. Beyond financial considerations, assess their vision for the company and their approach to human resources.

Ask yourself the right questions:

• Does the acquirer commit to maintaining jobs?
• What is their development strategy?
• Do they plan synergies that would involve restructuring?
• How do they envisage the company culture?

These elements can legitimately be part of your selection criteria and feature in the negotiations.

Negotiating job guarantees

Nothing prevents you from negotiating job protection clauses in the sale agreement. These commitments may cover:

• Maintaining headcount for a set period
• Guaranteeing salary conditions
• Keeping the current workplace
• Retaining key positions

Although not mandatory, these clauses demonstrate your commitment to your employees and reassure the teams about their future.

Supporting the transition

A successful transfer does not end with the signing of the sale agreement. The transition period is crucial for your employees. Consider:

• Staying on for a few months after the sale to ensure a proper handover
• Facilitating introductions between the acquirer and key employees
• Passing on the company culture and working habits
• Being available to reassure the teams if difficulties arise

Conclusion: a responsibility that honours the entrepreneur

Selling your SME in French-speaking Switzerland does not mean abandoning your employees. The Swiss legal framework offers robust protection, and your personal involvement can strengthen it considerably.

By choosing your acquirer carefully, communicating transparently and supporting the transition, you lay the foundations for a successful transfer. Your employees will be able to continue their professional journey under the best conditions, perpetuating the legacy you have built.

Selling a business is the culmination of an entrepreneurial adventure. Securing the future of those who contributed to its success is undoubtedly the finest way to bring it to a close.