Yes. Where a part of the employer that retains its identity is transferred, the rights and obligations under the employment relationships pass to the buyer by operation of law and the employees do not sign new employment contracts. Both the seller and the buyer must inform the employees’ representatives, or the employees directly, in writing in advance, in Slovakia at the latest one month before the transfer. The same principle applies in the Czech Republic, with an information period of 30 days; an employee who gives notice because of the transfer within 15 days of being informed in time ends the employment no later than the day before the transfer.
On the sale of a division it often emerges that the buyer wants the operation but not all the people, or that the seller would be glad to keep certain key people. Employment law narrows the parties’ scope for choice here. On the sale of an enterprise and of a part of one, the Commercial Code expressly provides that the rights and obligations under the employment relationships pass to the buyer (Section 480), and the Labour Code frames the rule more broadly: what matters is whether an economic unit is being transferred, not what the parties call the contract.
Slovakia: when the transfer occurs
Where an economic unit is transferred, which for the purposes of this Act means the employer or a part of the employer, or where a task or activity of the employer or a part thereof is transferred to another employer, the rights and obligations under the employment relationships in respect of the transferred employees pass to the transferee employer.
— Section 28(1) of Act No. 311/2001 Coll. (unofficial English translation)
A transfer of an economic unit means a transfer of an organised grouping of tangible, intangible and personal elements serving an economic activity and retaining its identity (Section 28(2)). The rights and obligations pass directly by operation of law, so the employees do not sign new employment contracts and their employment relationships continue with the transferee employer. The transferee must also comply with the collective agreement concluded by the previous employer, until that agreement ceases to have effect (Section 31(7)). On a partial division of a limited liability company, it is the transformation plan that determines which employees pass to the successor company and which remain (Section 61(f) of Act No. 309/2023 Coll.).
Informing at least one month in advance
At the latest one month before the transfer, the employer must inform the employees’ representatives in writing, or the employees directly if there are none, of the date of the transfer, its reasons, its employment, economic and social consequences and the measures planned (Section 29(1)). It must discuss the measures affecting the employees with the employees’ representatives at the latest one month before they are implemented, with a view to reaching agreement (Section 29(2)). Both duties also apply to the transferee employer (Section 29(3)), so the information is usually joint and its content is agreed by the parties in the transaction documentation.
Where working conditions are to change
The buyer sometimes plans, after taking over, to change the place of work, the working time or the remuneration. For that case, the Labour Code gives the employee particular protection:
Where the transfer is to bring about a fundamental change in the employee’s working conditions and the employee does not agree to that change, the employment relationship is deemed to have been terminated by agreement on the grounds under Section 63(1)(b) as at the date of the transfer.
— Section 29a of Act No. 311/2001 Coll. (unofficial English translation)
The employer issues the employee with a written document on the termination of the employment relationship, and the employee is entitled to severance pay under Section 76. That cost has to be reckoned with when setting the purchase price and when allocating risks between the seller and the buyer.
The Czech Republic: 30 days and notice before the transfer
The Czech Labour Code proceeds from the same principle. On a transfer of the employer’s activity or of a part of it, the rights and obligations under the employment relationships pass to the transferee employer in full, and the rights under the collective agreement for the period of its effect, at most until the end of the following calendar year (Section 338(2) of Act No. 262/2006 Sb.). The purchase of a business is treated as a transfer of the employer’s activity (Section 2175(2) of Act No. 89/2012 Sb.), and the sale of a part of a business forming an independent organisational unit is assessed in the same way (Section 2183). Both the existing and the transferee employer must, at the latest 30 days before the transfer, inform the trade union organisation and the works council and discuss with them the reasons, the consequences and the measures envisaged; where none operates at the employer, they inform the employees concerned directly (Section 339).
An employee who does not wish to pass to the new employer may, under the Czech Labour Code, give notice on grounds of the transfer within 15 days of being informed in time, and the employment relationship ends at the latest on the day preceding the transfer (Section 51a(1)). If the employer failed to comply with its information duty in time, the employee may give notice even within two months after the transfer, with a notice period of 15 days (Section 51a(2)). If the employment relationship ends within two months of the transfer by the employee’s notice or by agreement, the employee may apply to the court for a declaration that it left because of a material deterioration in working conditions in connection with the transfer, in which case it is entitled to severance pay (Section 339a). On a division of a company under the Czech Act on Transformations, the employees who pass or remain are determined by the division plan (Section 250(1)(h) of Act No. 125/2008 Sb.).
What this means for the transaction
A list of the employees belonging to the division is one of the first sets of materials we prepare in a carve-out. The buyer takes over their employment entitlements as they arose with the seller, so they belong in the legal due diligence and in the seller’s representations. The timetable must accommodate the information period and the discussion with the employees’ representatives before the date of the transfer. Whether the transaction is a sale of part of an enterprise at all is examined in the question sale of part of an enterprise, or just assets. We prepare the transfer of employees, the information for them and the contractual allocation of risks through the service carve-out, sale of part of a business or in company sales and purchases. The first step is to book an initial consultation.
This answer provides general information on the law as at 12 September 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
