Employment Law2026-11-07

A transfer offer within the group: what employees need to check before signing with a sister company

Instead of a redundancy, you are offered a move to another company in the group. What to check before you sign — business transfer or new contract, length of service, deadlines.

Your plant is closing or production is being relocated, and instead of a redundancy notice there is an offer on the table: you are to move to another company within the same group, “on unchanged terms”. Often that genuinely is the better option. What matters, though, is what the document says — and what it leaves out, because you are getting a new employer, and with that employer a great deal begins again from scratch in legal terms.

In short

A move within the group is a change of employer. It happens in one of two ways. Either it occurs by operation of law, because your business or part of your business passes to the other company by way of a legal transaction (§ 613a Abs. 1 Satz 1 BGB) — in which case your rights and obligations transfer automatically, without your having to sign anything. Or it happens only because you sign; in that case, with the new employer, generally only what has been expressly agreed applies. So first establish which of the two routes you are on, and then check four points: length of service, probationary period and protection against dismissal, collective agreement and works agreements, and the company pension scheme.

How I can help you

Classifying your case: a business transfer under § 613a BGB or a free change of employer by contract
Checking the notification letter under § 613a Abs. 5 BGB for completeness
Reviewing the contract package line by line, with concretely drafted amendments for the negotiation
Working through the alternatives: sign, object, or decline — and what each one costs you
Checking whether a reconciliation of interests, a social plan or a collective agreement gives you claims of your own
Observing deadlines and, where necessary, representing you before the labour court

What representation will cost in your case I discuss openly at the first meeting — under the RVG, by agreement, or through your legal expenses insurance, whose cover I will request on your behalf. You will find further topics under employment law.

First establish: a business transfer or a new contract?

No one can unilaterally assign you to another company. The right to issue instructions under § 106 GewO allows the employer to specify the content, place and time of your work in the exercise of reasonable discretion — it does not allow the employer to swap out the contracting party. A change of employer therefore requires your consent, or it follows directly from the law.

The latter is the case where a business or part of a business passes to a new owner by way of a legal transaction: that owner then steps into the rights and obligations arising from the existing employment relationships. Whether this applies is decided by the substance, not by the heading on the letter. If the sister company takes over the established unit — plant, processes, products, customers, workforce — and continues to run it, that points strongly towards a transfer. If the old plant is genuinely shut down and the new company merely hires afresh, there is no transfer.

The difference is substantial. On a business transfer, your length of service, protection against dismissal, remaining holiday and working-time account are all preserved; rights under a collective agreement or works agreement become part of the content of your employment relationship and may not be altered to your detriment for one year — subject to the exceptions in § 613a Abs. 1 Satz 3 und 4 BGB, for instance where a different collective agreement applies at the new owner. A dismissal on account of the transfer is void (§ 613a Abs. 4 BGB). For claims that arose before the transfer and fall due within one year, the old employer continues to be liable as a joint and several debtor (§ 613a Abs. 2 BGB).

For this reason: where there is a business transfer, a termination agreement cannot simply sweep those consequences away. An arrangement whose real purpose is only to remove the protection of § 613a BGB and re-engage you on worse terms with the acquirer is, as a rule, void under § 134 BGB. Any termination by notice or by dissolution agreement requires the written form in any event; the electronic form is excluded (§ 623 BGB).

As has recently been reported, in practice this is often exactly how it unfolds: a group stops production at one plant and offers all of its roughly 230 employees a move to a sister company a few kilometres away, on their existing terms and with recognition of their length of service. That avoids redundancies for operational reasons. The legal questions do not disappear with it — they shift into the contract.

What the document must contain

Check the contract package against these points. On a genuine new contract, whatever is not written in it does not apply:

Length of service running from your original start date, and expressly for all purposes: notice periods (which under § 622 Abs. 2 BGB lengthen with the duration of employment, up to seven months), the qualifying period for protection against dismissal, social selection, service anniversaries, special payments, holiday entitlement tiers. The bare formula “with recognition of length of service” is too vague.
No new probationary period (§ 622 Abs. 3 BGB) and no new six-month qualifying period under § 1 Abs. 1 KSchG.
No fixed term, and no revocation or discretionary clause attached to allowances.
The role, grading, working hours and shift pattern named specifically, not merely “equivalent”.
Pay in full: basic wage, shift and hardship premiums, annual special payment, variable components.
Collective-agreement coverage: which collective agreement applies at the new employer? Different works agreements will also apply at the new establishment.
Company pension: continuation of the existing commitment with the original commitment date and the entitlement already earned — not a new pension scheme that knows nothing of your years.
Remaining holiday, overtime and working-time account: carried over rather than paid out, with figures.
Settlement clauses: a sentence stating that, on signature, all claims from the old employment relationship are discharged will also extinguish the very thing you are not thinking about right now.

The deadlines that matter

On a business transfer, you must be informed in text form, before the transfer, of its timing, the reason for it, its legal, economic and social consequences, and the measures planned (§ 613a Abs. 5 BGB). From the moment this notification reaches you, you have one month in which to object to the transfer in writing (§ 613a Abs. 6 BGB) — to either the old or the new employer; a plain email will generally not suffice for this. Note the date of receipt. If the notification is incomplete in its content, even the point at which the one-month period begins is open to doubt.

Before you object, work through the consequence: your employment relationship then stays with the old employer — whose business is being closed. A dismissal for operational reasons is the likely result, and the social selection under § 1 Abs. 3 KSchG then takes place only among those who have remained there.

If it comes to a dismissal, you have three weeks from receipt of the written notice to bring a claim before the labour court (§ 4 KSchG). If instead you are served a dismissal with the option of altered terms, you can accept the altered offer subject to reservation; the reservation must be declared within the notice period, but at the latest within three weeks of receipt (§ 2 KSchG). For a signed termination agreement or three-party contract, by contrast, there is no statutory right of withdrawal — which is why all the weight falls before you sign.

Shutting down or relocating a business or substantial parts of it are operational changes under § 111 BetrVG; in undertakings that normally employ more than twenty workers entitled to vote, the works council must be informed and involved in good time and comprehensively. A social plan has the effect of a works agreement (§ 112 Abs. 1 BetrVG) and so applies directly and with binding force; you can waive rights under it only with the works council’s consent (§ 77 Abs. 4 BetrVG). So have it checked whether a “transfer arrangement” is, in substance, a works agreement — because if it is, you have claims of your own under it, independently of whatever you are told in the meeting.

Conversely, declining can prove costly: under § 112 Abs. 5 BetrVG, employees who refuse reasonable continued employment at another establishment of the undertaking or at a company within the group are to be excluded from social plan benefits — and the fact that the available continued employment is at a different location does not, on its own, make it unreasonable. If the reconciliation of interests names the employees to be dismissed individually, it is moreover presumed that the dismissal is required for operational reasons, and the social selection can then be reviewed only for gross error (§ 1 Abs. 5 KSchG). Before any dismissal the works council must be consulted; a dismissal pronounced without consultation is void (§ 102 Abs. 1 BetrVG).

A typical case

A production worker, fourteen years with the business, learns of the closure at a works meeting. After the meeting a three-party contract is handed out: dissolution with the old employer, re-engagement with the sister company, “the same terms”. On reading it, the picture emerges: six months’ probation, length of service “recognised for anniversaries” and for that alone, the shift premium not mentioned, and a settlement clause discharging all claims from the old employment relationship. Two things need clarifying: whether a business transfer is in fact present here anyway — in which case she would not need this contract at all — and, if not, which four sentences must be changed before she signs. Both can be answered within a few days if the documents are complete.

Common mistakes

Signing at the table without taking a copy away and without asking for time to consider. You are entitled to ask for time; the documents are yours.
Believing the label. Whether a business transfer exists is not stated in the subject line; it follows from the facts.
Failing to get oral assurances from the HR meeting into the contract.
Putting the notification letter aside without recording the date and its receipt — and so letting the one-month period slip from your hands.
Lodging an objection as a bargaining lever without realising that your employment relationship then stays with the employer who has no job for you.
Declining the offer out of annoyance and, in doing so, risking the social plan claim.
Letting the three weeks after a dismissal elapse. After that the dismissal is, as a rule, effective — even where it would have been open to challenge.

Frequently asked questions

Can my employer simply assign me to another company in the group?

No. The right to issue instructions under § 106 GewO extends to the content, place and time of your work, not to swapping out the contracting party. A different employer comes into play only through your consent — or by operation of law, where your business or part of your business transfers under § 613a BGB. Even a broadly drafted transfer clause generally changes nothing in this respect.

What happens if I decline the offer?

Your employment relationship stays with your existing employer. If the job there is lost, a dismissal for operational reasons usually follows, against which you can bring a claim within three weeks (§ 4 KSchG). On top of that you risk losing social plan benefits, because § 112 Abs. 5 BetrVG provides for the exclusion of those who refuse reasonable continued employment within the group.

Is the assurance “with full recognition of length of service” enough?

As a sentence in the contract it is too vague. Have the start date named, together with the purposes for which it applies: notice period, the qualifying period for protection against dismissal, social selection, holiday entitlement tiers, special payments, service anniversaries, and the length of service in the company pension scheme. Otherwise you will be arguing years later about what was meant.

Do I keep my protection against dismissal?

On a business transfer, yes — it passes over with the employment relationship. On a genuine new contract, the six-month qualifying period under § 1 Abs. 1 KSchG begins afresh unless otherwise agreed; it also depends on the size of the new establishment (§ 23 KSchG). And in any later social selection your length of service counts only in so far as it has been contractually recognised.

Am I entitled to a severance payment if I move?

There is no general statutory right to severance. Claims arise from a social plan, a reconciliation of interests, a collective agreement or an individual arrangement. Someone who keeps their job typically receives no severance — which is why, here, the negotiation focuses on the terms of the contract, not on a sum.

Your next step

If a termination agreement or a three-party contract is in front of you, all that counts now is what you do before you sign — after that the position is, as a rule, locked in. Gather your employment contract, the notification letter, the contract offer, and the reconciliation of interests or social plan as far as you have them, and have the package reviewed before you agree. What to watch for, and how I work through an offer like this, you will find on the page on the termination agreement. I work throughout Germany, by video or telephone; an initial assessment is usually possible the same or the next working day.

This article provides general information and is no substitute for legal advice in an individual case.

This article provides general information and is no substitute for legal advice in an individual case. Last updated: 2026-11-07.

Christian Czirnich, Rechtsanwalt (attorney at law), Kirchseeon near Munich

Tell me what the transfer offer says – I will take a look.

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