Manage employees when you sell or close your business

As the current business owner, you have limited options:

• If you close your business, you have to let your employees go.
• If you sell your business, your employees may transfer to the new business or end employment with the business.

You have several obligations to ensure that you fairly treat employees through this change:

• provide notice
• finalise payments (including any redundancy pay owing)

The award or enterprise agreement that applies to your business may have extra rules like needing to consult with staff or giving time off to look for other work, so remember to check what yours.

1. Communicate with your employees

Change can be stressful for employees. Communication is key!

One way to help your employees through this change is to give them as much notice about the change as possible.

Learn more about how to manage change in your business.

2. Provide notice

It doesn’t matter if you close or sell your business, either change means that an employee’s position with you ends. You must give official notice or provide payment in lieu of notice to all employees.

If a transfer of business occurs before the notice period ends, you must still pay the rest of the notice period to your employees even if they continue to work for the new owner.

No matter if employees cease employment with the business or transfer to the new owner, the law requires you to give them official notice in writing.