Start with the employing entity and transaction structure
Business.gov.au states that when a business is sold, employees may transfer to the new business or their employment may end. Confirm whether the buyer is acquiring assets through a different entity or acquiring shares in the existing employing company.
| Issue | Asset sale | Share sale |
|---|---|---|
| Employer | The seller's employment may end and the buyer may offer employment through a different entity. | The employing company generally remains the same while its shareholders change. |
| Transfer analysis | Fair Work transfer-of-business rules may apply depending on the connection, work, timing, and employment arrangements. | A share ownership change does not by itself substitute a new employing entity. |
| Agreements | Review notice, redundancy, service, transfer, award, enterprise agreement, and proposed buyer terms. | Existing employment continues with the company, but later changes require their own lawful process. |
| Personal information | Disclosure needs an identified purpose, lawful basis, minimisation, access controls, and retention plan. | |
Review awards, enterprise agreements, contracts, and consultation
Business.gov.au warns that an applicable award or enterprise agreement may contain extra rules, including consultation requirements or time off to seek other work. Review the actual instrument and employment contract for every affected group.
- employing entity, role, location, duties, and work performed
- applicable modern award, enterprise agreement, or other instrument
- employment contract, amendments, and policies
- notice, redundancy, leave, incentives, and service
- union, representative, and consultation requirements
- state or territory long service leave, workers compensation, licensing, and payroll obligations
Do not use the sale agreement as a substitute for the employer's Fair Work and contractual process.
Transfer of business is fact-specific
Fair Work Ombudsman guidance addresses rights and obligations when businesses change hands and employee entitlements on a transfer of business. The legal test depends on the connection between the old and new employers, the employee's work, timing, and the actual arrangement.
Business.gov.au tells a seller whose employees will transfer to provide current employee records to the new owner, identify contractual, leave, financial, and legal obligations, agree responsibility for obligations, and give employees required notice.
Do not assume that every employee automatically transfers, that prior service is treated the same for every entitlement, or that redundancy is always payable or never payable. Review each affected employee with an Australian employment lawyer.
Control employee information during due diligence
OAIC guidance on APP 6 says an APP entity generally uses or discloses personal information for its primary purpose unless an exception applies. Employee diligence should therefore be staged and minimised.
- Use aggregated, non-identifying workforce information for early assessment.
- Redact unnecessary identifiers and restrict access for qualified diligence.
- Identify the APP 6 basis before disclosing employee-level information.
- Use secure transfer, access logs, retention limits, and prompt removal of buyer access when the process ends.
Treat names, contact details, dates of birth, health information, performance records, bank details, identity documents, visa records, and individual remuneration according to their sensitivity and purpose. A confidentiality agreement alone does not establish that every disclosure is appropriate.
Build an employee transaction register
| Field | Seller-side purpose |
|---|---|
| Employee and work | Confirm employer, role, location, duties, workstream, and key dependencies. |
| Instrument | Link the award, enterprise agreement, contract, amendments, and policies. |
| Entitlements | Record leave, service, notice, redundancy, incentives, and unresolved advice points. |
| Proposed treatment | Record the structure, proposed buyer offer, transfer analysis, and open decisions without presenting proposals as outcomes. |
| Privacy status | Record purpose, basis, redaction, access level, disclosure history, and retention. |
| Process owner | Assign legal review, seller action, buyer dependency, consultation, communication, and evidence. |
Communicate facts, proposals, and decisions accurately
Plan who communicates, what has been decided, what remains conditional, which entity owns each step, what employees can review, and how questions or corrections are handled.
Do not say that nothing will change unless that statement is accurate, authorised, and supportable. Do not promise continued employment or unchanged terms on behalf of the buyer. Where answers are unavailable, state what is undecided and who owns the decision.
Review this guide alongside the Australian asset versus share sale guide and sale-process guide.