Taking over a structure or an activity whether it operates as a company, an association, or an establishment isn’t just about acquiring know-how, assets, or a client portfolio, or continuing an activity. It’s boarding a ship that has already been sailing for a long time: its course, its crew, but also the waves it has already weathered don’t disappear the moment the takeover happens. In employment matters, history isn’t erased by a change of employer. Article L. 1224-1 of the French Labor Code governs, when its conditions are met, the continuation of employment contracts with the new employer, a principle regularly reminded by the Court of Cassation (Cass. soc., Jan. 31, 2024, no. 21-25.273). This continuity also applies to takeovers involving a public entity: Article L. 1224-3 specifically governs the takeover of an activity, previously carried out by an entity employing private-law employees, by a public entity within the framework of an administrative public service. In other words: the captain may change, but the crew and its employment history don’t stay behind on the dock.
The captain changes, the obligations stay on board. In situations falling under Article L. 1224-1, the change of employer also has consequences for obligations arising before the transfer. Article L. 1224-2 organizes how these are allocated between employers. The Court of Cassation consistently reminds the consequences triggered by the transfer when the legal conditions are met (Cass. soc., June 23, 2021, no. 18-24.597). So whether it’s a matter of taking over a company, an association, an establishment, or an activity, changing employers doesn’t mean starting with a blank page. Contracts, individual situations, ongoing disputes, employment commitments, and internal practices must all be identified beforehand.
The best compass: anticipation. The new employer may be exposed to liability toward employees as a result of the takeover. Hence the importance of a social/employment audit to precisely identify the obligations likely to continue or be transferred, assess their consequences, and provide for appropriate contractual guarantees where the nature of the transaction allows. The goal, isn’t to make the risk disappear, but to understand its scope, determine how it’s allocated, and above all, control its cost.
Between headwinds and tailwinds, it’s all a matter of preparation. The continuity of contracts is also an opportunity: it ensures the continuation of the business and the retention of the skills that give it its value. But this requires sorting things out beforehand: ongoing disputes, employment commitments, individual situations, and internal practices. Anticipating these matters transforms an employment risk endured into a risk that is identified, controlled, and where possible negotiated.
The course is passed on. The risks are steered.
ærige supports you in staying the course.
